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1921 


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PROCEEDINGS  OF  A  CONFERENCE 


ON 

THE  ECONOMICS  OF  HIGHWAY 
TRANSPORT 

CALLED  BY  THE 

HIGHWAY  AND  HIGHWAY  TRANSPORT 
EDUCATION  COMMITTEE 


HELD  AT  THE 

UNIVERSITY  OF  M  Ai^^Nh  c.c  ;  i.;-*;!-: 

JULY  27,  1921 
EDITED  BY  C.  J.  TILDEN 


PRICE,  50  CENTS 


Published  by  the 

Highway  and  Highway  Transport  Education  Committee 

Washington,  D.  C. 

1922 


THE  HIGHWAY  AND  HIGHWAY  TRANSPORT  EDUCATION 

COMMITTEE 

Willard  Building,  Washington,  D.  C. 

Appointed  May  28,  1920,  by  Dr.  P.  P.  Claxton,  Commissioner  of  Education, 
and  First  Chairman  of  the  Committee. 

JOHN  J.  TIGERT,  U.  S.  Commissioner  of  Education,  Chairman  after  August  8, 
1921. 

THOMAS  H.  MAcDox ALD,  Chief  of  the  Bureau  of  Public  Roads,  U.  S.  Depart- 
ment of  Agriculture. 

F.  C.  BOGGS,  Colonel,  Corps  of  Engineers,  U.  S.  Army,  representing  the  War 
Department. 

ROY  D.  CHAPIN,  President,  Hudson  Motor  Car  Company,  representing  the 
National  Automobile  Chamber  of  Commerce. 

HARVEY  S.  FIRESTONE,  President,  Firestone  Tire  and  Rubber  Company,  repre- 
senting the  Rubber  Association  of  America. 

F.  L.  BISHOP,  Dean  of  Engineering,  University  of  Pittsburgh,  representing 
the  Society  for  the  Promotion  of  Engineering  Education. 

VV.  S.  KELLER,  State  Highway  Engineer  of  Alabama,  representing  the  American 
Association  of  State  Highway  Officials. 


C.  J.  TILDEN,  Director. 


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PROCEEDINGS  OF  A  CONFERENCE 

ON 

THE  ECONOMICS  OF  HIGHWAY 
TRANSPORT 

CALLED  BY  THE 

HIGHWAY  AND  HIGHWAY  TRANSPORT 
EDUCATION  COMMITTEE 

HELD  AT  THE 

UNIVERSITY  OF  MARYLAND,  COLLEGE  PARK 
JULY  27,  1921 

EDITED  BY  C.  J.  TILDEN 


PRICE,  50  CENTS 


Published  by  the 

Highway  and  Highway  Transport  Education  Committee 

Washington,  D.  C. 

1922 


f-f  E3B& 


Program 
The  Economics  of  Highway  Transport 

^  Conference  called  by  the  Highway  and  Highway  Transport  Education 
Committee  for  July  27,  1921 

Object 

The  purpose  of  the  conference  is  to  define  the  chief  economic  problems 
underlying  the  building  and  use  of  our  highways,  and  suggest  topics  for  college 
courses,  both  graduate  and  undergraduate,  in  highway  and  highway  transport 
economics. 


10  a.  m.     Meet  at  Bureau  of  Public  Roads,  Willard  Building,  Washington,  and 

take  automobiles  for  the  University  of  Maryland,  College  Park. 

11  a.  m.      First  session: 

Greeting  from  President  Woods. 

Chairman  of  the  Conference,  President  Charles  S.  Howe,  Case  School 

of  Applied  Science,  Cleveland. 

Topics:    Highway  Transport  (pp.  6-14). 

Highway  Finance  (pp.  14-17). 

Economic    Problems    of   Construction    and    Maintenance 
(pp.  18-20).       . 

i  p.  m.     Luncheon.    Those  attending  the  Conference  are  guests  of  the  Univer- 
sity of  Maryland. 

2. 20  p.  m.  Second  Session: 

Highway  Administration  (pp.  24-28). 

Cost  Accounting   in   Highway  Transport  Operation   (pp. 

29-33). 
National  and  State  Legislation  (pp.  33-41). 


M323544 

H 


Conference  on 
The  Economics  of  Highway  Transport 

HpHE  Conference  was  called  to  order  by  Professor  C.  J.  Tilden,  Director  of 

the  Committee,  who  said: 

The  Highway  and  Highway  Transport  Education  Committee  has  called 
this  conference  for  the  purpose  of  getting  your  advice  and  help.  The  rapid 
development  of  motor  transport,  with  increased  production  of  motor  vehicles 
and  consequent  stimulation  of  public  interest  in  highways,  has  raised  economic 
questions  difficult  to  answer.  Many  of  these  have  not  as  yet  even  been  clearly 
formulated.  Technical  schools  have  surprisingly  few  courses  bearing  on  the 
subject,  although  it  is  of  vital  concern  to  every  citizen. 

We  have  asked  you,  therefore,  to  come  together  as  representatives  of 
various  interests — industrial,  governmental,  municipal  and  university — to 
exchange  views  and,  through  discussion,  indicate  the  direction  in  which  educa- 
tional activity  may  be  started.  In  the  letter  of  invitation  it  was  suggested 
that  the  conference  was  not  to  be  controversial  in  any  way.  It  is  hoped  that 
suggestions  may  be  made  regarding  the  topics  of  undergraduate  and  graduate 
courses,  questions  for  research,  etc. 

We  are  particularly  fortunate  in  being  guests  of  the  University  of  Maryland 
on  this  occasion.  President  Woods  and  Dean  Johnson  have  been  especially 
active  in  arranging  for  our  comfort  here,  and  I  am  going  to  ask  President  Woods 
if  he  will  give  us  a  word  of  greeting. 

PRESIDENT  WOODS:  I  am  very  glad  indeed  for  the  opportunity  of  welcoming 
you  here,  because  highway  engineering  has  for  many  years  been  a  subject  of 
very  great  interest  in  Maryland,  especially  the  work  that  is  being  done  in  the 
state  in  the  practical  application  of  engineering  research  to  highway  construc- 
tion and  use.  The  University  of  Maryland  is  intensely  interested  in  this  work 
and  desires  to  promote  it  in  every  way.  The  old  idea  that  an  engineering 
department  could  teach  what  it  wanted  to,  in  the  way  it  wanted  to,  regardless 
of  the  application  to  the  problems  to  be  solved  in  the  industries,  has  been  done 
away  with.  To  study  these  problems  in  the  way  you  are  attacking  them 
today  has  evidently  established  a  new  viewpoint  in  relation  to  industrial,  educa- 
tion. We  must  analyze  our  problems,  find  out  what  our  engineers  need  to 
know  in  order  to  solve  them,  and  see  that  the  necessary  training  is  given.  This 
will  not  be  too  narrow  and  specialized.  We  are  trying  to  find  out  just  what 
this  training  should  be.  We  are  going  to  take  the  recommendations  and 
suggestions  you  make  and  put  them  in  operation  as  far  as  our  finances  will 
permit.  We  want  to  assure  you  that  not  only  are  you  welcome  here  but  your 
suggestions  are  welcome  in  our  curriculum.  We  will  try  to  carry  out  in  our 
educational  processes  the  things  you  determine  are  necessary  to  train  men  in 
the  way  you  want  them  trained.  Please  make  yourselves  at  home. 

5 


6  The  Economics  of  Highway   Transport 

Dr.  Charles  S.  Howe,  President  of  Case  School  of  Applied  Science  in  Cleve- 
land, was  asked  to  take  the  chair  as  permanent  presiding  officer  of  the  Con- 
ference. 

DR.  HOWE:  I  esteem  it  a  very  great  privilege  to  preside  over  this  convention. 
First,  I  want  to  thank  President  Woods  on  your  behalf  for  his  kindly  greeting 
to  us  and  say  that  we  are  very  glad  to  be  his  guests  at  the  University  of  Maryland 
today.  We  hope  that  he  and  the  members  of  his  faculty  will  consider  themselves 
guests  of  the  convention  and  take  part  freely  in  all  of  these  discussions. 

You  who  are  gathered  here  today  are  experts  on  various  questions  to  be 
discussed.  I  do  not  intend  to  take  your  time.  We  shall  proceed  directly  to  the 
business  of  the  conference.  The  first  paper  or  address  will  be  by  Mr.  MacDon- 
ald,  Chief  of  the  Bureau  of  Public  Roads  of  the  Department  of  Agriculture. 

MR.  MACDONALD:  The  questions  which  to  me  seem  most  important  are 
those  of  an  economic  character.  We  have  been  able  for  the  past  two  or  three 
years  to  push  forward  a  large  program  of  road  construction  because  funds  were 
provided  in  ample  amounts.  During  that  period  some  states  have  exhausted, 
or  practically  exhausted,  their  credit  as  states  by  bond  issues;  other  states  are 
verging  towards  that  point  under  existing  laws.  When  I  say  "exhausted  their 
credit"  I  do  not  mean  exhausted  the  resources  of  their  states  but  have  exhausted 
their  credit  under  existing  constitutions  and  laws.  In  order,  therefore,  to  main- 
tain the  program  of  highway  improvement,  which  is  needed  to  provide  sufficient 
mileage,  we  must  solve  satisfactorily  the  financial  questions  involved.  High- 
way bonds  are  coming  into  competition  with  other  securities  which  may  offer 
larger  returns.  Then  we  have  the  question  of  the  service  which  we  will  obtain 
from  the  roads,  and  that  we  must  answer  from  the  economic  standpoint  so  that 
we  may  know  how  much  we  are  justified  in  putting  into  roads.  So  the  questions 
which  are  of  a  major  character  now,  it  seems  to  me,  are  economic,  or  partially 
so,  and  it  is  to  get  the  viewpoint  of  men  of  many  minds  and  many  occupations 
on  these  questions,  and  to  bring  these  minds  to  bear  upon  their  solution,  that 
we  have  thought  it  desirable  and  advisable  to  have  this  conference  today.  It 
is  looking  toward  the  development  of  an  adequate  system  of  highways  in  this 
country,  financed  within  our  resources  and  carried  forward  at  a  rate  as  fast  as 
our  resources  will  permit. 

CHAIRMAN:  I  shall  call  next  on  Professor  W.  Kendrick  Hatt.  Dr.  Hatt  is 
Professor  of  Civil  Engineering,  Purdue  University,  and  Director,  Highway 
Research,  National  Research  Council. 

DR.  HATT:  For  the  purpose  of  a  coordinated  and  comprehensive  program 
of  Highway  Research,  I  have  been  endeavoring  to  bring  into  the  picture  all  the 
elements  of  the  situation  in  Highway  Transport, — Engineering,  including  vehicle 
and  road;  Economics  of  Transportation;  Administration;  Finance.  Some 
comprehensive  and  logical  assemblage  will  be  helpful. 

It  appears  that  there  are  many  dimly  seen  figures  which  should  be  advanced 
from  the  background;  there  is  much  that  is  unknown.  We  may  ask  a  few 
questions  which  cannot  be  completely  answered. 


The  Economics  of  Highway  Transport  7 

SOME  FUNDAMENTAL  QUESTIONS  IN  HIGHWAY  TRANSPORT 
The  Transport  Unit: 

1.  What  is  the  economical  highway  truck  unit  for  each  of  the  several  situa- 

tions, e.g.,  intercity,  farm 'to  market? 
What  is  the  cost  of  transport  arising  from  vehicle  and  from  road? 

2.  What  is  the  relation  of  this  economical  unit  to  other  systems  of  transport, 

e.g.,  electric  and  steam,  in  a  unified  system? 

3.  To  what  extent,  as  a  matter  of  public  policy,  should  any  transport  unit  be 

indirectly  subsidized? 

4.  What  traffic  regulations  should  be  imposed  on  such  economical  unit  over 

other  types  of  road  ? 
What  fees  should  be  charged  for  service  rendered  to  vehicle  by  the  road? 

5.  What  should  be  the  proportion  of  the  total  traffic  supplied  by  such  econom- 

ical unit  to  justify  a  special  design  of  road  for  such  unit? 

6.  What  prediction  can  be  made  of  future  changes  in  general  traffic  and  what 

is  the  influence  of  these  on  the  economics  of  the  present  situation? 

7.  How  should  passenger  traffic  over  the  highway  be  evaluated? 

The  Road: 

•    i.  What  type  of  road  paving  should  be  selected  for  a  specified  transport  unit? 

2.  If  the  road  cannot  be  economically  fitted  to  the  truck  transport  unit, 

can  the  latter  be  modified  in  design  to  fit  the  road? 

3.  How  should  the  design  of  the  road  and  paving  be  modified  to  meet  changing 

conditions  of  subgrade,  climate,  etc.? 
How  shall  sub-soils  be  improved? 

,,4.  What  sum  of  money  is  the  locating  engineer  justified  in  spending  to  avcid 
increase  in  distance,  curvature,  rise  and  fall,  maximum  grade,  maximum 
curve  ? 

5.  What  system  of  maintenance  and  organization  is  best  fitted  for  types  of 

reads,  differing  in  traffic,  in  materials,  and  in  climate? 

6.  What  is  capacity  of  a  road  of  given  width  for  type  of  vehicle  as  expressed 

in  vehicles  per  hour,  ton-miles  per  year,  etc.  ? 
What  is  the  appropriate  unit  for  expressing  traffic  fcr  various  purposes? 

7.  (In  construction  many  questions  arise  in  select-ion,  production  and  econom- 

ical use  of  materials,  standardization  and  regulation). 

8.  How  may  the  volumetric  changes  in  roads  be  overcome? 

9.  W7hat  is  the  economical  life  of  various  types  of  roads,  that  is,  when  main- 

tenance charges  exc'eed  earning  value? 

Administration: 

1.  What  should  be  the  policy  in  control  of  truck  and  bus  transportation  sys- 

tems, terminals,  routing,  etc.  ? 

2.  What  police  regulations  should  control  use  of  roads? 


The  Economics  of  Highway  Transport 


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The  Economics  of  Highway  Transport  9 

3.  What  is  the  best  administrative  and  executive  organization  for  administra- 

tion and  operation  of  roads? 

4.  What  principles  should  govern  the  selection  of  a  system  of  roads  in  its 

various  parts,  as    influenced    by  interstate,  intrastate,  county,  local 
traffic,  etc.? 
Financing: 

1.  What  should  be  method  of  financing  construction  and  maintenance  of 

roads?  What  portions  of  cost  from  long  term  bonds,  and  what  from 
current  funds?  What  form  of  bonds  should  be  issued  and  how  create 
a  market  for  them  ? 

2.  What  should  be  the  relation  between  life  of  bonds  and  economical  life  of 

road  ? 

3.  To  what  extent  do  social  betterment,  military  use,  i.e.,  social  value,  and 

other  imponderables  enter  into  highway  policy? 

4.  What  should  be  the  distribution  of  costs  as  between  Federal,  state,  county, 

township,  property  benefited,  the  user  and  other  units? 

5.  How  shall  the  future  maintenance  charges  on  completed  road  systems  be 

met?     Shall  the  user  pay  all  of  these? 

6.  How  shall  safety  be  ensured  on  the  roads? 

Answers  to  these  questions  cannot  be  made  without  data  that  are  at  present 
unavailable. 

Research  is  necessary,  and  a  mobilization  of  the  efforts  of  research  agencies 
in  a  comprehensive  program.  The  Highway  Research  Committee  of  the 
Division  of  Engineering  of  the  National  Research  Council  has  undertaken  the 
coordination  of  such  research.  The  National  Research  Council  will  not  engage 
in  research  directly. 

The  chart  reproduced  herewith  is  devised  to  indicate  the  field  of  research 
as  divided  into  subfields  in  which  research  should  be  developed,  and  from  which 
data  should  come  to  enable  answers  to  be  made  to  these  questions  among  others. 

Some  of  the  studies  that  should  be  made  are  as  follows: 

1.  To  develop  a  traffic  census  blank.     Here  a  traffic  classification  must  be 

made,  the  purpose  of  the  census  determined,  and  the  various  forms  and 
instructions  standardized. 

2.  In  order  to  determine  the  cost  of  transport,  a  statistical  table  must  be  made 

that  notes  all  of  the  elements  of  cost;  sometimes  only  a  few  of  these  are 
reported. 

3.  To  study  the  operating  costs  of  elements  entering  into  location  of  highways, 

such  as  distance,  grade,  curvature. 

4.  To  study  loads  on  roads  as  produced  by  the  vehicle. 

5.  To  study  design  of  vehicles  with  a  view  to  lessening  their  effects  on  the 

road. 

6.  To  study  supporting  power  and  improvement  of  subgrades  and  the  relation 

to  design  of  paving. 


10  The  Economics  of  Highway  Transport 

7.  To  study  resistance  of  concrete  slabs  to  alternate  stresses  and  to  surface 
.loads.  . 

.8.  To  study  proportioning  and  use  of  bituminous  materials. 

9.  To  study  bonding  of  brick  surfaces. 

10.  To  study  volume  changes  and  the  means  of  meeting  them, 
n.  To  study  operations  of  concrete  mixers. 

12.  To  study  the  organization  and  economics  of  construction  plants. 

13.  To  study  sand-clay,  top-soil  and  gravel  roads. 

14.  To  study  cellular  and  other  new  types  of  paving. 

There  is  apparently  a  widespread  activity  in  highway  research  throughout 
the  United  States  on  the  part  of  the  Bureau  of  Roads,  the  U.  S.  Army,  the 
State  Highway  Commissions,  the  universities,  and  of  industrial  organizations, 
and  an  earnest  desire  to  put  highway  construction  on  a  scientific  basis. 

The  economical  features  are  under  critical  examination  by  such  organiza- 
tions as  the  National  Chamber  of  Commerce. 

We  should  be  able  to  express  quantitatively  the  results  of  a  standardized 
economic  survey  of  a  road  project,  just  as  in  the  case  of  a  water-power  project 
for  instance,  except  for  those  imponderables,  which,  like  social  betterment  and 
public  policy,  influence  the  conclusions  so  profoundly. 

It  is  not  too  much  to  say  that  the  situation  is  critical,' and  that  the  sooner 
those  interested  come  to  a  basis  of  fact  the  more  assurance  we  will  have  that 
the  public  will  not  interrupt  progress  in  providing  for  Highway  Transport 
because  of  a  general  feeling  of  insecurity. 

Individuals  in  industry  who  have  endeavored  to  state  the  problem  in  approxi- 
mate statistics  tell  us  that  there  are  ten  billions  of  dollars  invested  in  self- 
propelled  vehicles,  and  that  the  turn  over  is  three  billions  annually;  that  there 
are  ten  passenger  vehicles  to  one  freight  vehicle,  and  that  the  problems  of  speed 
and  safety  are  most  important;  that  the  annual  expenditure  for  operation  of 
vehicles  is  twelve  times  the  annual  expenditure  on  the  roads,  therefore  the  field 
of  research  on  cost  of  vehicle  operation  arising  from  the  road  surface  and  from 
the  vehicle  itself  must  be  kept  in  the  foreground;  that  transportation  by  self- 
propelled  vehicle  is  the  most  expensive  of  all  commercial  forms;  it  will  increase. 
Everyone  pays  for  inefficiency. 

CHAIRMAN:  Professor  Hatt  has  given  us  an  admirable  analysis  of  the  ques- 
tions involved  in  highway  matters,  and  this  paper  will  come  up  for  discussion 
as  soon  as  we  have  finished  with  the  general  subject  of  highway  transport. 
The  next  speaker  is  Mr.  Roy  D.  Chapin,  President  of  the  Hudson  Motor  Car 
Company  of  Detroit. 

MR.  CHAPIN:  It  seems  rather  appropriate,  to  think  it  over,  that  the  con- 
ference on  this  important  subject  should  be  held  in  Maryland.  The  first 
great  activity  in  highways  in  this  country  of  an  interstate  scope  started  in 
Maryland.  As  you  remember,  the  Old  National  Road  began  at  Cumberland 
and  ran  westward,  so  that  Maryland  has  always  evidenced  an  interest  in  the 
development  of  highways  and  highway  transport,  and  probably  went  as  far  in 


The  Economics  of  Highway  Transport  11 

utilizing  highway  transport  a  hundred  years  ago  as  any  other  state.  Highway 
transport  is  perhaps  more  comprehensive  in  its  scope  than  most  of  you  consider 
it.  I  visualize  highway  transport  as  covering  the  entire  subject  of  both  the 
building  of  the  road  and  transportation  over  it,  exactly  as  when  we  talk  of 
railroads  and  railroad  transportation  we  mean  the  unity  of  both  the  roadbed 
and  the  traffic  over  it. 

In  the  economics  of  highway  transport  it  seems  to  me  that  we  are  studying 
something  which  not  only  has  a  general  basic  result  in  the  cost  of  living  and 
happiness  of  our  American  people,  but  also  has  a  very  important  bearing  upon 
our  financial  situation.  It  is  a  well-known  fact  today  that  in  some  states  the 
funds  appropriated  for  highways  are,  as  has  been  said,  largely  used  up,  and  it 
is  going  to  be  a  question  of  getting  further  bond  issues.  Now  on  what  basis  can 
you  get  further  bond  issues?  There  is  only  one  way  and  that  is,  because  the 
roads  that  have  been  built  have  returned  dollar  for  dollar,  that  the  taxpayer 
can  be  convinced  that  the  new  roads  that  are  to  be  built  under  new  bond  issues 
will  return  dollar  for  dollar. 

We  must  not  overlook  the  fact  that  railroads  are  finding  tremendous  difficulty 
in  financing  themselves.  Why  is  that?  Very  largely  because  of  lack  of  sound 
economic  study  of  their  problems  when  things  were  going  easily,  when  they 
could  get  their  money  easily.  We  are  getting  money  easily  today  to  build 
highways.  During  the  past  few  years  an  astonishing  number  of  state  bond 
issues  have  been  passed  all  over  the  country,  and  the  ease  with  which  those 
campaigns  have  been  put  through  recalls  the  old  phrase  "Easy  come,  easy  go." 
There  is  a  possibility  that  within  the  next  five  years  we  shall  find  the  taxpayers 
of  this  country  in  this  mood:  "We  have  not  had  a  dollar's  worth  of  value  in 
highways  and  highway  trarfsport  for  the  dollars  we  have  given;  therefore  you 
cannot  have  any  more — you  have  to  show  us."  We  certainly  do  not  want 
development  of  highway  transport  to  fall  into  the  same  situation  as  the  develop- 
ment of  rivers  and  harbors  of  this  country,  because  today  plenty  of  very  neces- 
sary projects  find  it  impossible  to  get  any  money.  We  are  coming  to  that,  I 
believe,  unless  the  men  seated  in  this  room  and  others  will  collaborate,  will 
put  their  brains  together  on  this  question  and  will  develop  some  basic  laws  in 
highway  building  and  the  use  of  the  highways,  and,  further  than  that,  in  the 
relation  between  highway  and  vehicle,  so  that  we  shall  have  a  sound  develop- 
ment for  the  benefit  of  every  taxpayer  and  every  citizen  of  the  country. 

I  do  not  think  it  is  generally  realized  that  at  least  ten  billion  dollars  today 
are  invested  in  vehicles  alone  operated  over  the  highways  of  this  country.  By 
that  I  mean  self-propelled  vehicles,  leaving  out  entirely  horse-drawn  vehicles  and 
other  types  used  over  the  roads,  investments  in  carriages  and  other  collateral 
business  that  goes  with  the  use  of  the  vehicles.  It  has  been  estimated  by  the 
United  States  Chamber  of  Commerce,  that  twenty-one  billion  dollars  are 
invested  in  highway  transport  in  this  country,  including  the  improvements 
on  the  road  but  nothing  for  right  of  way.  That  represents  more  than  the 
total  investment  in  railroads  in  the  United  States.  Today  the  new  investment 


12  The  Economics  of  Highway   Transport 

going  into  railroads,  the  building  of  new  roads,  is  insignificant.  The  building 
of  highways  and  the  use  of  highway  vehicles  is  the  great  new  development  in 
transportation  in  the  United  States.  In  addition  to  the  twenty-one  billion 
dollars  invested  there  is  an  annual  maintenance  charge  on  highways  and  on 
vehicles  which  has  not  been  at  all  accurately  calculated  so  far,  but  I  venture  to 
say  that  it  is  equal  to  that  of  the  railroads,  if  not  greater. 

It  is  the  duty  of  this  conference  to  outline  very  specifically,  if  possible,  the 
problems  in  highway  transport  that  present  themselves,  and  make  these  sub- 
jects of  general  study  throughout  the  country.  We  have  got  to  look  at  this 
question  just  as  today  we  are  looking  at  the  railroad  problem.  We  are  not 
concerned  merely  with  the  railroad  that  runs  past  your  factory  and  through  your 
town,  but  with  railroads  as  a  whole,  and  the  highway  transport  problem  of 
this  country  as  a  whole.  We  should  nationalize  as  much  as  we  can.  Many 
of  our  systems  connected  with  highways  should  be  made  as  uniform  as  possible; 
for  example,  laws  regulating  the  use  of  highways  and  vehicles.  With  ten  billion 
dollars  invested  in  vehicles  alone,  not  including  horse-drawn  vehicles,  have  you 
not  a  very  serious  problem,  not  in  the  relation  of  the  vehicle  to  the  road,  of 
which  we  have  heard  so  much  in  the  last  few  years,  but  in  the  relation  of  the 
road  to  the  vehicle?  Within  two  or  three  years,  or  five  years  at  the  outside, 
almost  every  taxpayer  in  the  United  States  will  own  some  kind  of  vehicle. 
Have  you  not  thrown  on  that  taxpayer,  by  virtue  of  poorly  built  roads,  ill- 
considered  roads,  roads  running  over  the  wrong  routes,  and  in  many  other  ways, 
an  annual  maintenance  charge  on  his  vehicle  which  is  out  of  all  proportion  to 
what  he  should  pay?  If  you  have  increased  his  haulage  cost,  either  passenger 
or  freight,  you  have  an  uneconomical  situation  which  must  be  corrected.  The 
taxpayer  supplies  the  money  and  he  has  got  to  be  shown. 

In  the  programs  that  have  usually  been  presented  we  have  not  given  enough 
study  to  the  question  of  freight  vehicles;  that  is,  haulage  of  goods  over  the  road. 
Possibly  we  can  go  further  in  the  question  of  haulage  of  passengers.  The 
proportion  of  vehicles  hauling  freight  and  passengers  today  is  one  to  ten.  This 
proportion  is  going  to  change.  The  percentage  of  freight  vehicles  will  increase. 
The.  Bureau  of  Public  Roads  has  stated  that  its  research  programs  have  been 
devoted  to  trucks  over  the  highways  and  not  passenger  cars,  because  any  road 
that  will  stand  up  under  truck  traffic  is  all  right  for  passenger  car  traffic.  That 
may  be  so  as  far  as  actual  wearing  surface  is  concerned,  but  the  problems  of 
route  and  of  speed  throw  a  new  burden  on  the  highway  engineer.  You  have 
also,  and  this  evidently  comes  within  the  field  of  economics  of  highway  trans- 
port, the  problem  of  building  safely,  and  certainly  nothing  is  worth  more  than 
the  saving  of  lives. 

If  it  has  been  demonstrated  (and  I  think  during  the  war  it  became  quite 
clear)  that  short-line  railroads,  in  most  instances,  have  outlived  their  usefulness 
because  the  motor  truck  has  taken  their  place,  is  not  the  time  coming  when  you 
are  not  going  to  build  new  interurban  street  car  lines?  The  highway  vehicle 
that  can  run  on  any  route — a  route  which  can  be  changed  at  will — will  super- 
sede the  street  car. 


The  Economics  of  'Highway  Transport  13 

There  is  one  thing  I  want  to  emphasize  again.  The  time  has  come 
when  this  question  must  be  studied  from  the  national  standpoint.  In  other 
words,  the  time  for  merely  local  investigation,  local  plans  and  local  develop- 
ment is  over.  Every  single  thought  that  we  have  in  America  should  be 
put  into  one  common  melting  pot,  and  I  hope  particularly  as  a  result  of 
this  conference  that  basic  laws  may  be  laid  down  which  will  not  only  develop 
the  highways  from  an  engineering  standpoint  but  will  develop  traffic  over 
those  highways — which  is  the  only  reason  for  highways  and  vehicles — along 
sound* economic  lines  which  will  be  just  as  valuable  for  New  Mexico  as  for 
New  York  and  Maine. 

CHAIRMAN:  The  question  of  highway  transportation  is  so  closely  connected 
with  that  of  marketing  that  I  am  going  to  call  on  Mr.  L.  M.  Estabrook,  Associate 
Chief  of  the  Bureau  of  Markets  and  Crop  Estimates  of  the  Department  of 
Agriculture. 

MR.  ESTABROOK:  The  officials  of  the  Bureau  of  Markets  and  Crop  Esti- 
mates realize  the  tremendous  economic  importance  of  highways  in  transporting 
farm  produce.  Recently  I  had  occasion  to  have  some  figures  collected  for  the 
Joint  Congressional  Committee  on  Agricultural  Inquiry  in  relation  to  the  cost 
of  freight  rates  as  applied  to  farm  crops.  The  figures  compiled  may  be  of 
interest  to  those  here.  It  is  estimated  that  annually  about  153,400,000  tons 
of  farm  produce  move  over  the  railroads  at  a  cost  of  considerably  more  than  a 
billion  dollars  in  freight.  All  of  that  tremendous  tonnage  is  first  hauled  over 
country  roads  and,  of  course,  in  addition  there  is  a  very  large  tonnage  which 
never  gets  on  the  railroads  at  all.  Each  haul  to  shipping  point  or  market 
involves  a  return  trip.  Furthermore,  there  is  a  tremendous  tonnage  in  the 
aggregate  of  farm  equipment,  machinery,  implements,  fertilizers,  and  supplies 
of  various  kinds  required  to  maintain  and  operate  nearly  six  and  one-half  millon 
farms  and  nearly  fifty  million  people,  hauled  to  the  farms  over  country  roads. 
In  a  meeting  of  this  kind  it  is  sufficient  to  merely  mention  the  fact  that  acces- 
sibility of  farm  to  market  is  one  of  the  most  important  factors  in  the  conduct  of 
this  eighty-billion-dollar  industry,  it  is  an  important  factor  of  good  farm  manage- 
ment and  of  the  individual  farm  business.  Accessibility  of  farm  to  market  is 
synonymous  with  good  roads. 

The  Bureau  of  Markets  and  Crop  Estimates  is  undergoing  a  reorganization 
and  some  redirection  of  its  activities  at  the  present  time.  It  is  contemplated 
to  bring  in  the  office  of  Farm  Management  during  the  course  of  the  next  year, 
assuming  that  Congress  will  authorize  the  consolidation,  and  the  combined 
work  will  be  directed  more  along  economic  lines  than  in  the  past,  the  consolidated 
bureau  to  be  known  as  the  Bureau  of  Agricultural  Economics.  With  the 
personnel  and  equipment  of  this"  combined  bureau  we  expect  to  have  better 
facilities  in  the  future  for  making  inquiries  on  a  country-wide  basis  relating  to 
the  various  factors  involved  in  the  marketing  of  farm  products,  which,  of  course, 
includes  transportation.  It  is  quite  likely  that  this  bureau  will  be  in  a  position 
to  supply  information  of  great  value  in  connection  with  the  economic  studies 


14  The  Economics  of  Highway  Transport 

which  this  conference  is  outlining  today.  It  should  be  possible  to  estimate 
with  a  fair  degree  of  accuracy  the  number  of  miles  of  roads  of  different  character 
in  each  county  and  state,  the  number  of  farms  served  by  each  mile  of  road,  the 
tonnage  hauled  from  and  to  each  farm  per  month^and  per  annum  on  the  average, 
the  number  of  days  when  roads  cannot  be  used  because  of  bad  condition  or 
weather,  relative  size  of  load  hauled  at  different  seasons  over  different  kinds  of 
roads,  and  the  consensus  of  opinion  of  the  farmers  themselves  as  to  the  kind  of 
roads  that  will  best  serve  their  needs — in  other  words,  some  of  the  data  which 
road  engineers,  economists,  business  men,  and  legislators  need  in  order  to 
map  out  a  constructive,  long-time  program  which  will  result  in  developing  a 
system  of  roads  of  greatest  value  to  the  greatest  number  of  people. 

CHAIRMAN:  The  next  general  topic  is  Highway  Finance.  Mr.  A.  J.  Bros- 
seau,  President  of  the  International  Motor  Company  of  New  York,  will  open 
the  discussion. 

MR.  BROSSEAU:  The  most  important  problem  before  those  who  are  interested 
in  highways  is  the  question  of  finance.  The  roads  will  be  paid  for  by  the  tax- 
payer, but  if  the  public,  who  is  both  taxpayer  and  user,  realizing  the  advantages 
of  highway  transport,  decides  to  build  highways  that  are  open  to  all  users,  it 
is,  in  effect,  really  building  roads  for  its  own  use.  If  we  are  to  ask  the  public 
for  money  to  build  roads  to  promote  highway  transport,  we  shall  make  a  big 
mistake  if  we  do  not  build  properly. 

Obviously  the  road  must  justify  itself  as  to  cost.  It  is  as  big  a  mistake  to 
build  too  well  where  the  traffic  does  not  justify,  as  to  build  not  well  enough. 
If  such  mistakes  are  made,  money  will  be  thrown  away,  and  the  public,  who 
may  not  analyze  the  problem  thoroughly,  will  say — "This  highway  thing  is 
no  good.  We  have  spent  a  lot  of  money  for  roads  that  have  been  ruined,  and 
what  is  the  use?"  If  such  a  state  of  mind  is  created,  it  would  take  years  to 
overcome  the  prejudice. 

The  railroads,  in  their  early  days,  built  cheaply,  without  regard  to  the  re- 
quirements of  traffic  and  without  regard  to  the  future,  with  the  result  that  the 
roads  had  to  be  rebuilt.  We  cannot  afford  to  make  the  same  mistake  with 
highways  and  highway  transport.  The  public  will  willingly  furnish  money  to 
build  roads  that  are  justified  by  the  traffic,  whether  for  motor  truck,  motor  bus 
or  passenger  car,  and  they  should  not  be  asked  for  more.  When  I  say  the  public, 
I  mean  the  taxpayers. 

I  have  here  the  Journal  of  the  Engineers  Club  of  Philadelphia*  and  will 
read  a  short  excerpt  from  one  of  the  articles. 

"Future  conditions  cannot  be  foreseen  with  accuracy,  but  in  building  roads, 
the  possible  or  probable  changes  should  be  estimated  and  provided  for.  It 
may  be  assumed  that  in  practically  all  cases  the  improvement  of  a  road  or 
street  will  increase  its  importance,  probably  result  in  improvement  of  the 
adjacent  property  to  a  relatively  high  degree,  and  increase  the  amount  and 
severity  of  the  traffic  to  be  carried  by  the  road.  Hence  it  seldom,  if  ever,  occurs 


Volume  38,  page  230  (June,  1921). 


The  Economics  of  Highway   Transport  15 

that  a  character  of  results  which  will  just  satisfy  present  conditions  most 
economically  will  be  efficient,  or  even  satisfactory,  within  the  first  few  years 
after  the  completion  of  the  road." 

This  article  prompts  me  to  call  to  the  attention  of  educators,  economists 
and  others  who  are  expected  to  teach  the  fundamentals  of  Highway  Transport, 
that  the  facts  herein  stated  must  be  impressed  upon  the  public.  If  they  are 
not,  I  am  fearful  that  many  roads  will  be  built  so  poorly  that  they  will  not  carry 
the  traffic,  and  the  result  will  be  that  the  whole  highway  system  will  be 
condemned. 

As  a  rule,  when  one  speaks  of  improved  highways,  the  average  man  thinks 
of  a  very  heavy  concrete  road  built  at  a  tremendous  expense.  Such  roads  are 
not  needed  everywhere.  It  is  highly  important  that  we  have  a  system  of 
primary  roads  that  will  carry  the  heavy  traffic  in  congested  districts,  but  they 
should  be  built  only  after  careful  analysis  has  been  made  to  determine  whether 
the  traffic  will  justify  the  expenditure.  We  also  need  a  system  of  secondary 
roads  that  may  be  hard  surfaced,  but  not  particularly  heavy  in  order  to  meet 
the  needs  of  local  traffic  conditions.  There  is,  of  course,  a  tremendous  volume 
of  traffic  on  these  secondary  roads,  but  the  unit  as  a  whole  is  light  and  the  dis- 
tance short.  If  the  highway  problem  is  approached  in  this  way,  we  can  develop 
a  satisfactory  and  completely  efficient  system  of  highways. 

The  construction  cost  of  primary  roads  should  be  shared  by  the  federal  and 
state  governments,  and  the  funds  contributed  by  the  state  should  be  provided 
for  by  bond  issues.  While  at  first  sight  the  question  of  maintenance  may  not 
seem  to  directly  affect  the  question  of  finance,  I  am  convinced  that  it  is  one  of 
the  most  important  elements.  If  the  taxpayers  approve  of  bond  issues  with 
which  to  build  roads,  they  have  a  perfect  right  to  insist  that  these  roads  shall 
for  all  time  be  properly  maintained.  They  will  not  approve  future  bond  issues 
if,  because  of  lack  of  maintenance,  the  roads  are  destroyed  long  before  the 
first  bonds  are  retired. 

The  present  system  of  taxing  motor  vehicles — whether  passenger  cars  or 
trucks — is  right  in  principle,  but  great  care  should  be  exercised  to  make  sure 
that  such  fees  are  not  unreasonable.  The  state  should  expend  the  fees  assessed 
against  motor  vehicles,  trucks,  buses,  gasoline  tax,  etc.,  for  maintenance  pur- 
poses, and  the  money  should  be  fairly  apportioned  to  maintain  primary,  second- 
ary and  all  other  roads,  but  nc  part  of  it  should  be  spent  for  new  construction. 
My  definition  of  maintenance  is  to  do  such  repair  and  reconstruction  work  as 
may  be  necessary  to  keep  the  road  always  in  as  good  condition  as  when  it  was 
built. 

Our  steam-road  friends  tell  us  that  they  built  their  roads  and  maintain  them 
at  their  own  expense  and  that  it  seems  unfair  to  them  for  the  taxpayers  to  build 
roads  which  the  motor  vehicles  use  without  charge.  I  told  a  very  good  friend 
of  mine — a  steam-road  man — the  other  day,  that  I  did  not  know  they  had 
built  their  roads,  but  supposed,  on  the  contrary,  that  they  had  gotten  a  great 
deal  of  help.  He  smiled,  and  there  was  no  more  discussion.  Steam-road 


16  The  Economics  of  Highway   Transport 

owners  and  others  who  state  that  the  motor  vehicle  is  subsidized  because  of  the 
free  use  of  roads  built  by  the  public  forget  that  the  steam  road  enjoys  a  monop- 
oly, and  that  the  highway  is  open  to  all. 

CHAIRMAN:  Professor  J.  Gordon  McKay,  Economist  of  the  Bureau  of  Public 
Roads  and  Professor  in  the  University  of  Wisconsin,  will  continue  the  discussion 
of  Highway  Finance. 

PROFESSOR  McKAY:  The  highway  economist,  engineer  and  administrator 
will  agree  that  there  is  urgent  need  of  extensive  economic  research  in  the  solution 
of  the  complex  problems  of  highway  valuation,  finance,  and  administration.  A 
wide  range  of  difficult  problems  confronts  the  investigator  in  the  field  of  high- 
way economics  from  the  intricate  task  of  valuation  to  the  less.difficult  problems 
of  administration. 

Naturally  the  first  step  is  to  select  the  subjects  for  investigation.  The 
second  phase  is  the  determination  of  the  major  problems  requiring  immediate 
investigation.  The  third  phase,  or  investigation  of  major  problems,  requires 
certain  preliminary  research  prior  to  field  work  and  experiment,  such  as  surveys 
of  primary  and  secondary  sources  of  information,  and  the  correlation  of  un- 
published data  in  the  possession  of  national,  state  and  private  agencies  working 
in  the  same  field,  that  the  best  results  may  be  obtained  and  waste  of  time  and 
duplication  of  results  may  be  avoided.  The  fourth  phase  of  investigation  is 
the  actual  research  and  experiment  in  the  field. 

In  the  following  outline  an  attempt  is  made  to  develop  the  first  two  stages, 
the  selection  of  problems,  and  their  organization  with  regard  to  their  importance 
as  subjects  requiring  immediate  investigation. 

HIGHWAY  VALUATION   . 

1.  Elements  in  a  plan  of  highway  valuation. 

2.  The  evaluation  of  the  several  classes  of  highways. 

3.  Increment  of  land  values  due  to  improvement  and  the  zone  of  increased 
land  values  as  a  basis  of  real  property  taxation. 

4.  Possibility  of  decreased  land  values  due  to  improvement,  when  taxation 
due  to  improvement  increases,  or  traffic  over  road  increases  to  point  where 
ownership  of  land  is  more  desirable  away  from  improvement. 

5.  Mileage  unit  measure  of  vehicle  traffic. 

6.  Limit  of  economy  and  waste  in  highway  construction  and  maintenance. 

7.  Average  economic  life  of  principal  road  types. 

8.  Analysis  of  principal  factors  involved  in  selection  of  primary  and  secondary 
road  systems. 

9.  Standardized  outline  and  purpose  of  a  traffic  census. 

10.  Maintenance,  a  factor  in  road  valuation. 

FINANCE 

1.  Sources  of  revenue  for  administration, "construction  and  maintenance. 

2.  Highway  funds  available  for  road  building,  1921  to  1925. 

3.  Future  source  of  highway  funds  and  control  over  expenditure. 


The  Economics  of  Highway  Transport  17 

4.  Permanent  and  temporary  bond  financing  of  highway  improvements. 

5.  Maladjustment  of  term  of  highway  bonds  to  life  of  improvement. 
.  6.  Insuring  a  market  for  highway  bonds. 

7.  Relatively  increasing  and  finally  decreasing  volume  of  highway  construc- 
tion funds  as  systems  near  completion,  constantly  increasing  volume  of  main- 
tenance funds. 

8.  Distribution  of  building  costs  between  federal,  state,  county  and  township 
units. 

9.  Theory  of  highway  finance. 

ADMINISTRATION 

1.  Classification  of  highways. 

2.  Distribution  of  administration,  control,  construction,  maintenance  and 
financing  between  federal,  state,  county  and  township  units. 

3.  Centralization  or  decentralization  of  highway  administration  and  control. 

4.  Planning   of  administration,   engineering   and   financial  policies   under 
budget  system. 

5.  Uniform  trail  marking. 

6.  Uniform  vehicle  license  legislation. 

7.  Cost  accounting,  basis  of  contractors  bids. 

8.  Digest  of  highway  legislation. 

9.  Model  highway  law,  an  outline. 

The  problems  outlined  above  are  divided  into  groups  in  the  order  of  their 
relative  importance,  with  highway  valuation  as  the  most  significant  and  with- 
out much  question  the  most  difficult.  The  increment  to  farm  land  values  due 
to  road  improvement  illustrates  this  point.  .  We  cannot  take  as  the  measure  of 
increased  rural  land  values  merely  the  difference  in  assessed  valuations  before 
and  after  road  improvement,  without  offsetting  increased  valuation  for  taxation 
purposes,  increased  price  of  farm  produce  during  the  same  period,  and  the 
natural  increase  of  land  values  due  to  increasing  population  in  proportion  to 
our  limited  land  supply.  It  is  fundamental  that  we  determine  as  accurately 
as  possible  the  service  value  of  our  highways  so  that  we  may  intelligently  com- 
pare construction  and  maintenance  costs  of  a  given  road  mileage  with  the 
service  value  or  utility  of  the  same  mileage.  We  must  answer  the  question  of 
property  and  vehicle  owners:  Are  we  building  roads  giving  maximum  service 
at  a  minimum  ccst? 

Sound  financial  policies  cannot  be  developed  until  the  information  is  secured 
which  must  be  the  foundation  of  a  sound  program  of  highway  finance.  For 
the  time  being  we  can  do  no  more  than  suggest  a  broad  outline  of  highway 
financing.  Construction  and  maintenance  are  not  major  problems  since  they 
are  determined  by  the  vehicles  which  we  permit  to  pass  over  our  highways  and 
cannot  economically  prescribe  the  vehicles  which  should  move  over  the  highway. 
Administration,  while  presenting  some  difficult  problems,  can  be  neglected  for 


18  The  Economics  of  Highway  Transport 

the  time,  since  it  does  not  assume  a  position  of  major  importance  in  comparison 
with  valuation  and  finance. 

This  outline,  if  it  truly  portrays  the  highway  problems  of  today,  is  suggestive 
of  the  field  of  highway  economic  research,  a  framework  upon  which  we  may 
build,  with  fact  and  not  fiction,  highway  policies.  If  it  receives  criticism  which 
will  add  to  it  more  important  problems,  or  eliminate  from  it  problems  of  lesser 
importance,  it  will  have  served  its  purpose. 

CHAIRMAN:  The  next  topic  is  "Economic  Problems  of  Construction  and 
Maintenance."  The  first  speaker  is  Mr.  M.  O.  Eldridge,  Director  of  Roads, 
American  Automobile  Association. 

MR.  ELDRIDGE:  Our  organization  is  intensely  interested  in  all  phases  of  this 
subject,  especially  those  phases  which  deal  with  the  question  of  classification  of 
highways,  economics  of  operation,  construction,  maintenance  and  the  financial 
problems  involved.  Some  people  seem  to  have  the  impression  that  the  motor 
vehicle  owners  of  the  country  are  desirous  of  obtaining  only  high  class  boulevards 
everywhere.  This  is  a  mistaken  impression,  because  the  great  bulk  of  car 
owners  realize  that  we  cannot  build  expensive  high  class  roads  everywhere  and 
all  at  once. 

There  should  be  first  a  scientific  classification  of  the  highways  into  groups  of 
varying  importance,  depending  upon  their  traffic  and  economic  value.  The 
more  important  roads  should  then  be  graded,  drained  and  surfaced  with  the 
more  durable  classes  of  materials,  the  secondary  classes  of  roads  should  be 
graded,  drained  and  surfaced  with  the  less  expensive  or  temporary  classes  of 
materials  such  as  broken  stone,  gravel  and  sand-clay,  and  the  less  important 
or  local  roads  should  be  graded,  drained  and  maintained  by  dragging  wherever 
the  traffic  justifies. 

There  is  great  need  for  accurate  and  uniform  traffic  information  which  will 
develop  a  quantitative  and  qualitative  analysis  of  traffic  over  the  highways. 
Many  traffic  studies  have  been  made  in  the  past,  but  they  have  not  been  uniform 
nor  have  they  been  properly  correlated.  Traffic  forms  of  one  State  are  different 
from  those  of  another.  Before  additional  traffic  counts  are  made  the  forms 
now  in  use  in  different  States  should  be  studied  and  a  uniform  blank  made  up 
so  that  the  records  may  be  comparable. 

Another  fruitful  field  for  study  and  research  is  that  of  safety.  College 
students  and  research  agencies  could  very  well  afford  to  devote  some  of  their 
time  to  the  study  of  safety  problems.  The  need  for  safer  highways  is  shown 
by  the  fact  that  last  year  three  times  as  many  people  were  killed  at  grade  cross- 
ings  in  the  United  States  as  were  killed  on  the  American  side  during  the  entire 
Revolutionary  War.  There  are  probably  more  people  killed  as  a  result  of 
automobile  accidents  in  the  United  States  each  year  than  from  any  other  one 
cause.  Highway  hazards  of  all  kinds  should  be  analyzed  and  the  remedies 
sought. 

CHAIRMAN:  Mr.  John  N.  Mackall,  Chairman  and  Chief  Engineer,  Maryland 
State  Roads  Commission,  is  the  next  speaker. 


The  Economics  of  Highway  Transport  19 

MR.  MACKALL:  There  has  been  little  or  no  study  given  to  the  economic 
problem  of  highway  construction  and  maintenance.  That  is  a  rather  strong 
indictment,  but  in  my  judgment  it  is  true.  I  have  seen  roads  destroyed  to 
build  new  ones  when  perhaps  the  interest  alone  on  the  construction  of  the  new 
road  would  far  more  than  offset  the  entire  cost  of  maintenance  on  the  old  road. 
We  have  got  to  go  a  little  further  and  stop  the  competition  that  is  going  on  and 
has  been  going  on  for  years  between  the  truck  manufacturer  and  the  road  maker, 
which  is  similar  to  the  competition  between  the  safe  breaker  and  the  safe  maker. 
Let  me  cite  a  specific  example,  our  road  running  by  here.1  In  1917-18,  that 
road  carried  a  tremendous  traffic,  not  so  great  in  number  of  units  as  in  size  of 
units.  For  practically  its  entire  length  in  April,  1918,  it  was  impassable.  It 
could  not  be  used  for  anything  except  very  light  trucks.  The  cost  of  rebuilding 
that  road  in  1918  was  $600,000.  A  traffic  count  was  taken  for  the  twelve 
months  preceding  reconstruction.  It  was  not  accurate  but  was  approximate. 
A  comprehensive  study  was  made  of  that  traffic  count  and  it  was  demonstrated 
by  the  Bureau  of  Public  Roads,  in  a  statement  which  they  published,  that  if  all 
the  units  of  5  tons  or  larger  had  been  carried  on  units  of  3  tons,  taking  the 
manufacturers'  rated  efficiency,  the  cost  to  the  operators  would  have  been 
1 1 5,000.  The  people  of  the  State  of  Maryland  paid  $600,000  to  permit  a  few 
truck  operators  to  save  $15,000.  It  is  a  very  serious  proposition,  and  I  hope 
this  conference  is  the  beginning  of  a  correlation  of  road  building  and  road 
maintenance  to  road  operation. 

Some  of  the  speakers,  Mr.  Chapin  particularly,  brought  out  the  fact  that 
the  road  in  itself  is  of  no  value — vehicles  are  of  no  value — it  is  highway  trans- 
portation. Certainly,  then,  the  road  builder  and  the  road  user  want  identically 
the  same  thing,  namely,  a  road  that  will  give  service  every  day  in  the  year. 
You  cannot  get  that  unless  you  correlate  road  construction  and  maintenance 
with  size,  speed  and  weight  of  vehicles  using  the  road. 

CHAIRMAN:  The  next  speaker  is  Mr.  N.  W.  Dougherty,  Professor  of  Civil 
Engineering  at  the  University  of  Tennessee. 

PROFESSOR  DOUGHERTY:  For  a  number  of  years  we  have  been  giving  a 
short  course  in  Highway  Engineering.  Engineers,  county  road  superintendents 
and  others  have  become  interested  in  the  work.  About  two  years  ago  we  de- 
cided to  undertake  an  enlargement  of  our  field  of  instruction  by  giving  some 
instruction  in  Highway  Economics.  The  material  given  that  year  was  sand- 
wiched into  the  course  on  Highway  Engineering  and  studied  in  connection  with 
surface  selection.  Last  year  we  enlarged  the  scope  of  the  work  and  gave  a 
six-weeks  course  on  what  we  called  Highway  Economics  and  Highway 
Oiganizations. 

The  course  was  outlined  about  as  follows:  Discover,  if  possible,  the  cost  of 
construction  of  the  types  of  surface,  giving  due  weight  to  such  items  as  distance, 
rise  and  fall,  and  curvature;  discover  the  cost  of  maintenance  of  the  several 


LThe  main  highway  between  Baltimore  and  Washington. 


20  The  Economics  of  Highway  Transport 

types;  determine  the  probable  life  of  the  pavements  considered;  investigate  the 
sources  of  material  supply;  determine  the  financial  condition  of  the  highway 
unit;  find  out  the  traffic  en  the  road  and  the  traffic  that  may  be  expected  during 
the  life  c.f  the  suiface,  and  finally,  undertake  to  choose  a  type  of  construction 
that  will  serve  the  needs  and  do  it  with  a  minimum  cost.  Special  stress  was 
placed  upon  the  fact  that  annual  cost  of  operation  of  traffic  over  the  roads  is  as 
much  a  part  of  the  highway  problem  as  the  building  and  maintaining  of  the 
roads.  The  same  public  pays  the  bill,  whether  it  be  for  building  roads  or  for 
transporting  freight  and  passengers  over  them. 

In  our  study  we  found  a  great  dearth  of  reliable  cost  data.  It  is  doubtful 
whether  anyone  knows  the  exact  cost  of  rise  and  fall  or  curvature,  or,  indeed, 
many  other  items  which  enter  into  the  location  and  construction  of  a  highway. 
The  information  on  maintenance  is  very  meager,  and  highway  users  have 
just  begun  to  realize  the  need  of  exact  data  on  the  cost  of  operation.  In  giving 
this  work  we  tried  to  stress  the  need  of  accurate  data  and  the  further  need  of  a 
careful  study  of  the  whole  problem  before  expending  large  sums  of  money. 

There  is  no  question  in  my  mind  that  we  are  building  roads  which  are  not 
justified  by  the  probable  traffic  during  the  life  of  the  road.  We  are  all  familiar 
with  roads  that  are  so  bad  that  large  sums  of  money  could  be  profitably  expended 
to  avoid  the  "bad  road  tax."  We  have,  on  the  one  hand,  roads  so  poor  that 
they  cannot  be  traversed,  and  on  the  other  hand  constructions  so  expensive 
that  they  are  not  justified.  It  is  only  by  a  study  of  the  whole  problem  that  a 
reasonable  solution  may  be  obtained. 

Let  us  take  the  example  of  two  counties  of  practically  the  same  area  and 
having  approximately  the  same  road  mileage.  In  one  of  those  counties  the 
taxable  property  is  twenty  times  as  great  as  that  of  the  other.  Certainly  the 
problems  of  the  two  counties  are  vastly  different.  I  have  heard  road  builders 

say,  "The  only  type  of  road  I  am  willing  to  build  is (high  class)  surface." 

If  an  earth  road  can  care  for  the  traffic  most  economically,  the  earth  road  is 
the  type  that  should  be  used.  If  an  expensive  type  of  surface  is  necessary,  the 
expensive  type  should  be  built.  In  studying  the  problem,  however,  all  items 
should  be  considered.  It  will  not  do  to  study  maintenance  alone,  or  main- 
tenance, first  cost  and  depreciation  alone,  but  the  whole  problem  of  first  cost, 
depreciation,  maintenance  and  cost  of  operation  must  be  studied.  The  same 
public  which  pays  for  the  building  of  the  road  pays  for  its  upkeep,  and  for  the 
transportation  over  the  road.  The  whole  people  are  benefited  in  some  way, 
some  directly  and  some  indirectly;  all  will  be  benefited  if  the  work  is  properly 
done.  The  problem  is  one  of  transportation  and  should  be  so  studied  that  the 
cost  of  transportation  may  be  a  minimum.  We  should  build  a  road  that  is 
satisfactory  to  the  highway  need  and  let  those  who  get  the  benefit  from  it  pay 
for  it. 

CHAIRMAN:  The  Highway  and  Highway  Transport  Education  Committee 
was  established  with  Dr.  P.  P.  Claxton,  then  Commissioner  of  the  United  States 
Bureau  of  Education,  as  its  chairman.  Dr.  Claxton  has  taken  a  great  interest 


The  Economics  of  Highway   Transport  21 

in  this  subject  and  I  will  ask  him  to  lead  the  discussion  of  the  topics  considered 
this  morning. 

DR.  CLAXTON:  There  is  no  reason,  as  far  as  I  know,  why  I  should  open  the 
discussion,  except  to  call  attention  to  the  fact  that  it  is  an  educational  question. 
Like  everything  else  in  a  democracy  it  begins  in  and  returns  to  education.  I 
am  exceedingly  pleased  at  the  results  that  are  coming  from  the  conference  that 
was  called  on  education  for  highway  engineering  and  highway  transport  a  little 
more  than  a  year  ago  in  Washington.  Some  of  you  gentlemen  were  present. 
That  conference  was  called,  not  for  the  purpose  of  discussing  highways  primarily, 
but  to  discuss  what  the  schools — high  schools,  universities,  technical  schools — 
should  do  toward  educating  people  for  the  building  of  highways  and  their  use, 
for  the  economic  use  of  automobiles  and  trucks  in  transporting  passengers  and 
freight  and  general  support  of  the  highway  building  program.  That  still  is  an 
important  thing  and  to  that  I  wish  to  speak  very  briefly. 

From  what  has  been  said  here  this  morning  and  at  all  of  the  meetings  of 
this  committee,  it  is  very  evident  that  much  must  be  done  in  the  way  of  research 
in  regard  to  the  building  of  highways — the  kind  of  highway  to  be  built  in  any 
particular  place,  the  kind  of  material  that  would  be  best  adapted  to  the  climatic 
condition  of  that  particular  section,  the  type  of  road  to  be  built  for  the  use  that 
is  to  be  made  of  it  within  the  next  few  decades;  then  to  teach  these  things  in  a 
reasonable  number  of  institutions.  It  is  something  that  we  cannot  hope  to 
teach  fully  and  completely  in  every  state.  Not  every  university  of  high  rank 
can  teach  highway  engineering  of  this  type.  It  brings  up  one  of  the  great 
problems  of  education  in  this  country,  not  only  in  regard  to  this  but  many  other 
phases.  We  have  no  national  system  of  education.  State  universities  are 
under  obligation  to  serve  their  particular  States,  and  they  have  before  them  the 
development  of  the  future.  Their  endowments  are  much  larger  than  any 
private  institution  like  Harvard,  Yale  or  Stanford.  No  endowment  fund  is  as 
large  as  the  wealth  of  all  the  people.  You  have  the  possibility  of  funds  far 
beyond  what  you  may  expect  to  get  from  individuals  or  any  particular  group 
giving  funds  voluntarily.  But  if  Maryland,  Virginia,  West  Virginia  and  Ken- 
tucky and  all  the  other  States  may  not  maintain  fully  developed  departments  of 
highway  engineering  and  economics,  there  must  be  some  way  by  which  students 
from  one  State  may  use  the  schools  of  another  State.  And  possibly  it  is  a  thing 
of  this  kind  that  will  bring  about  nationalizing  highway  educational  work  in  the 
United  States. 

A  bill  well  known  to  you  all  has  been  pending  in  the  Congress  of  the  United 
States  for  a  good  long  time — a  bill  which  will  appropriate  money  for  elementary 
schools.  It  is  far  more  important  that  the  higher  schools  like  the  State  univer- 
sities should  be  considered  as  national  organizations.  At  a  conference  last 
year  in  Washington  there  was  a  committee  from  the  paper  manufacturers 
wanting  us  to  discuss  the  technical  side  of  work  on  wood  pulp.  Evidently  there 
should  be  instruction  in  that  particular  subject  in  a  few  institutions  in  the 
United  States,  but  not  all.  Nevertheless  the  students  attending  State  univer- 


22  The  Economics  of  Highway   Transport 

sities  ought  to  have  free  access  to  these.  That  is  a  great  problem  the  educator 
of  today  will  have  to  discuss.  How  can  you  bring  it  about  to  give  the  best 
instruction  in  departments  most  fully  developed  in  all  of  these  subjects  at  such 
a  number  of  institutions  located  as  may  be  "most  desirable?  The  research  work 
can  be  done  very  largely,  of  course,  through  the  Research  Council,  through 
cooperation  with  the  State  departments,  State  universities  'and  engineering 
schools,  and,  as  already  suggested,  by  correlating  experiments  going  on  in 
practical  ways  throughout  the  United  States. 

This  morning  the  question  was  financing,  the  economic  side  of  the  whole 
thing.  Here  is  a  place  education  must  reach  not  only  a  few  men  here  and  there 
throughout  the  country  who  are  authority  on  the  subject,  but  the  masses  of  the 
people  must  be  brought  to  understand  something  of  that,  something  of  the 
common  wealth  in  which  they  have  a  part.  May  I  say  parenthetically  that  I 
think  it  is  important  now  to  bring  the  people  of  the  United  States  to  understand 
that  there  is  a  common  wealth,  and  when  a  man  contributes  his  little  part  and 
other  millions  contribute  their  part,  the  man  who  contributes  a  small  part  has 
a  full  share  in  all  he  can  use  of  all  of  it.  The  larger  part  he  can  contribute,  the 
wealthier  he  becomes.  Mr.  Rockefeller,  Sr.,  has  today  a  larger  heritage,  a  larger 
part  out  of  the  common  wealth  of  the  country  than  out  of  his  own  private, 
individual  wealth.  The  road  we  drove  over  this  morning  was  worth  a  dollar 
to  each  one  of  us.  There  is  such  a  thing  as  the  common  wealth,  the  general 
prosperity  of  the  country,  the  thing  we  all  can  use  when  we  need  to  use  it,  and 
the  highway  and  highway  transportation  belong  to  that  class  of  wealth. 

Another  thing  is  the  question  of  the  amount  this  common  wealth  adds  in 
possibilities  of  individual  wealth.  That  must  go  to  the  masses  of  the  people. 
We  all  agree  in  the  principle  of  no  taxation  without  representation.  We  must 
adapt  this  that  there  shall  be  no  attempt  at  taxation  without  understanding, 
without  instruction,  knowing  what  they  are  paying  for,  what  use  is  to  be  made 
of  it  and  what  benefit  they  will  finally  get  out  of  it.  I  am  not  in  sympathy 
with  what  I  have  heard  here  this  morning  (I  am,  however,  in  sympathy  with  a 
modification  of  it)  that  the  man  who  hauls  in  a  truck  over  the  road  or  in  his 
automobile  should  be  made  to  pay  for  the  road.  We  do  not  do  that  with  other 
things.  I  have  been  interested  for  forty  years  in  public  school  systems.  We 
call  any  school  a  public  school  regardless  whether  the  tax  is  collected  by  the 
tax  collector  or  by  a  man  who  goes  around  to  great  tax  collectors  like. Carnegie 
and  asks  them  to  hand  over  a  portion  for  schools.  No  matter  what  officer 
collects  the  taxes  they  are,  after  all,  paid  by  the  people.  We  have  long  ago 
passed  by  the  point  of  collecting  taxes  only  from  the  people  using  the  schools 
directly,  the  man  who  has  children  to  send.  The  millionaire  who  has  no  children 
to  send  or  who  otherwise  provides  for  their  education  is  a  user  of  the  public 
schools  just  as  much  as  if  he  had  a  dozen  children  to  send.  General  prosperity  is 
concerned.  Some  of  us  paid  taxes  for  the  great  war  who  ourselves  did  not  go 
and  use  those  guns  and  did  not  believe  we  were  in  immediate  danger  of  having 
our  property  on  this  side  destroyed.  It  was  for  the  public  welfare.  The  public 
school  system  is  for  the  public  welfare,  and  road  building  is  like  that. 


The  Economics  of  Highway  Transport  23 

We  must  teach  something  in  regard  to  highway  economics  in  our  colleges 
and  universities,  in  our  high  schools  and  elementary  schools,  and  to  the  present 
generation  who  have  already  passed  that  time,  by  some  means  of  extension. 
I  was  recently  at  a  conference  at  the  University  of  Tennessee.  Until  fifteen 
years  ago  it  had  no  support  whatever  from  the  State  of  Tennessee.  They  never 
gave  a  dollar  to  it.  So  rapidly  has  it  grown  in  the  confidence  of  the  people  that 
four  years  ago  $1,000,000  was  appropriated  by  the  legislature  for  new  buildings. 
At  the  conference  great  emphasis  was  laid  on  the  question  of  research.  Mr. 
Moody,  of  the  Co mmerdal  Appeal  of  Memphis,  made  a  brief  talk  on  educational 
extension,  getting  information  to  the  people,  letting  them  know  about  it.  He 
said,  "For  years  you  have  been  trying  to  get  things,  but  the  people  had  to  give 
you  the  means  to  do  it.  What  is  the  use  of  winking  at  a  pretty  girl  in  the  dark?'* 
It  was  worth  my  time  and  money  to  go  to  hear  that  figure  of  speech,  and  it  will 
be  worth  your  time  listening  to  me  if  you  will  remember  it.  What  is  the  use  of 
complaining  about  the  people  not  giving  money  when  they  have  not  been 
instructed?  We  shall  get  in  the  United  States  an  adequate  system  of  highways 
for  general  use  of  the  people  when  we  have  educated  the  people  through  colleges, 
universities,  high  schools  and  extension  agencies  to  the  value  of  the  highway 
and  of  motor  transport,  and  to  the  good  economy  of  paying  out  of  our  individual 
wealth  enough  that  they  may  have  their  full  part  in  the  great  common  wealth 
which  is  thus  produced. 

CHAIRMAN:  I  am  sure  many  of  you  here  would  like  to  discuss  the  papers  or 
addresses,  and  I  am  going  to  give  you  this  opportunity.  We  have  a  very  short 
time,  and  I  am  sure  many  of  you  either  agree  or  disagree  with  what  has  been 
said. 

MR.  BROSSEAU:  I  would  like  to  ask  Commissioner  Mackall  of  Maryland 
how  he  determined  that  the  5-ton  truck  ruined  his  road. 

.  MR.  MACKALL:  Perhaps  we  determined  it  in  a  very  elementary  way,  but 
I  believe  we  determined  it  satisfactorily.  At  least  our  methods  have  produced 
results.  Prior  to  the  year  1918  there  was  no  limit  to  the  weight  of  motor  trucks 
which  could  use  our  highways.  The  law  said  that  the  limit  should  be  14  tons — 
28,000  pounds — but  no  attempt  was  made  to  enforce  it.  In  1918  the  highways 
were  destroyed  in  many  sections,  and  the  legislature  said  in  unmistakable  terms 
that  "no  motor  vehicle  having  a  greater  rated  carrying  capacity  than  5  tons 
shall  be  operated  over  any  public  highway  in  this  State"  and  that  "the  limit  of 
load  per  inch  in  width  of  tire  shall  be  650  pounds."  Since  then  the  law  has  been 
rigidly  and  vigorously  enforced,  and  today  there  is  perhaps  less  than  one-half 
of  one  per  cent  of  overloaded  trucks.  Since  1918  not  a  failure  on  any  section 
of  highway  in  the  State  has  occurred.  Perhaps  there  were  many  contributing 
causes  in  1918,  and  perhaps  all  the  causes  have  been  eliminated.  However, 
this  fact  remains — we  eliminated  one  cause  and  eliminated  all  failures. 

MR.  BROSSEAU:  The  reason  I  asked  the  question  was  this.  I  drive  over  a 
section  of  road  known  as  the  Boston  Post  Road,  well  built  for  heavy  traffic. 
In  1918  the  second  failure  on  that  road  occurred.  It  was  determined  there  to 


24  The  Economics  of  Highway   Transport 

the  satisfaction  of  many  people  that  the  road  heaved  up  and  broke  down. 
I  just  wanted  to  know  if  that  condition  might  not  have  obtained  here. 

MR.  MACKALL:  Maybe.  The  winter  of  1919  was  the  most  severe  winter 
ever  experienced  in  this  locality,  and  the  winter  of  1920  was  the  mildest.  There 
was  no  failure  either  year.  I  don't  know  that  I  disagree  with  the  large  number 
of  people  who  say  we  should  build  better  roads  and  should  have  built  better 
roads.  Maybe  we  should,  but  we  didn't.  In  Maryland  we  have  2,200  miles 
of  complete  road  in  a  total  of  15,000,  a  larger  percentage  than  any  other  State 
in  the  Union.  They  cost  $30,000,000  when  they  were  built,  and  it  would  cost 
$60,000,000  to  replace  them.  What  are  we  going  to  do  about  it?  Are  we  going 
to  limit  the  load  or  are  we  going  to  do  as  some  would  have  us  do — permit  any 
load  that  a  manufacturer  chooses  to  put  on  that  road  and  destroy  the  roads  for 
all?  In  1918,  when  the  law  was  passed  prohibiting  licensing  of  vehicles  having 
a  greater  rated  carrying  capacity  than  5  tons,  approximately  150,000  vehicles 
were  registered  in  Maryland,  and  17  motor  trucks  larger  than  5  tons.  It 
would  have  been  infinitely  cheaper  to  have  taken  every  one  and  substituted 
3^-ton  trucks  and  paid  the  owners  for  the  rest  of  their  lives  the  difference  in 
cost  of  operation  than  to  repair  the  damage  the  17  trucks  did. 

MR.  PRIDE:  The  17  trucks  didn't  break  the  roads. 

MR.  MACKALL:  There  were  17  owned  in  the  State,  and  we  think  perhaps 
the  foreign  trucks  contributed  somewhat  to  the- damage.  We  think  also  some 
of  the  other  trucks  of  a  rated  capacity  of  less  than  4  tons  carried  more  than  that. 

AFTERNOON  SESSION 

CHAIRMAN:  The  next  topic  is  "Highway  Administration,"  and  the  first 
speaker  is  Dean  Chas.  L.  Raper,  of  the  College  of  Business  Administration, 
Syracuse  University. 

DEAN  RAPER:  Since  going  to  Syracuse  I  have  been  interested  in  questions 
of  operation  and  cost  of  operation  of  roads.  When  the  chair  of  transportation 
was  endowed,  there  were  no  strings  attached  to  it,  and  the  Department  of 
Transportation  was  to  be  developed  as  science  demanded  it.  Everything  we 
have  been  doing  in  the  field  of  motor  transport  has  the  background  of  rail  trans- 
portation. The  department  is  just  one  year  old,  and  last  fall  there  were  not 
many  students  able  to  take  the  course  profitably.  About  twelve  men  started 
out  with  that  course,  representing  eight  sections  of  the  counrty  from  middle 
Michigan  to  Long  Island.  We  soon  found  they  were  not  very  much  interested 
in  the  administration  of  a  highway  but  were  interested  in  the  question  of  the 
cost  of  operating  a  motor  car.  Each  man  took  it  upon  himself  to  consider  one 
definite  problem.  One  man  made  a'  study  of  the  cost  of  operating  trucks  in 
Syracuse.  He  found  that  only  one  firm  in  that  city  had  ever  given  very  much 
thought  to  the  cost  of  its  motor  truck  fleet.  This  firm  had  gone  into  many 
phases  of  the  question.  By  the  middle  of  last  year  every  single  truck  it  owned 
had  pneumatic  tires.  They  started  with  solid' tires.  They  didn't  care  about 


The  Economics  of  Highway   Transport  25 

the  streets,  they  belong  to  Syracuse,  but  they  did  care  how  much  damage  was 
done  to  the  trucks  and  to  the  goods  which  were  hauled. 

-Another  student  made  a  study  on  Long  Island  delivery  of  bread  a  distance 
of  60  miles  and  found  that  little  was  known  about  how  much  it  cost  to  operate. 
They  delivered  the  bread  and  didn't  think  about  the  cost.  One  man  did,  and 
found  that  if  he  made  a  careful  study  of  the  operation  of  his  trucks  he  could 
outsell  his  competitor,  deliver  bread  farther  out  and  make  a  profit.  The 
result  of  those  studies  convinced  me  of  two  or  three  things.  The  average  man 
who  owns  a  motor  car  hasn't  thought  very  much  about  his  car,  doesn't  know 
how  much  to  charge  you  for  carrying  you  5  miles  on  the  basis  of  cost  of  opera- 
tion, or  how  much  to  charge  if  he  carries  a  ton  of  freight.  It  is  all  haphazard 
guesswork.  Further,  the  moment  he  does  begin  to  think  about  how  much  to 
charge  for  carrying  goods,  he  is  up  against  the  highway.  On  a  perfectly  smooth, 
hard-surfaced  road,  the  resistance  per  ton  is  small.  You  have  to  consider  what 
kind  of  material  the  road  is  made  of.  Another  question  is  that  of  a  5  or  2  or  7 
per  cent  grade.  The  grade  hits  you  with  resistance  just  as  the  surface  does. 
Suppose  you  have  a  5  per  cent  grade.  That  increases  the  cost  of  gasoline,  oil 
and  many  other  things  to  the  owner.  Is  it  wise  for  the  public  to  cut  the  grade 
down  to  2  or  3  per  cent?  These  twelve  boys  made  a  study  in  ten  different  sec- 
tions. The  result,  while  immature — they  were  only  juniors  or  seniors  at  college 
— was  exceedingly  satisfactory  when  it  came  to  educating  boys,  and  I  believe 
satisfactory  when  it  came  to  the  public's  interest. 

About  administration.  Every  man  who  has  toured  over  a  dozen  roads  in 
this  country  has  one  definite  conclusion.  The  administration  ought  to  be 
centralized  as  much  as  possible.  I  have  long  since  come  to  the  conviction  that 
the  county  system  is  bad  if  the  county  is  completely  independent.  You  have 
got  to  have  a  state-wide  system  and  you  should  have  a  national  system  of 
administration  to  work  with  the  state  system.  The  administration  of  highways 
is  coming  to  be  almost  national  in  its  pcint  of  view.  I  hope  it  will  never  go 
back  to  the  local  unit  of  a  township,  county  or  town. 

CHAIRMAN:  Questions  of  safety  for  the  traveling  public  are  of  great  impor- 
tance in  connection  with  the  administration  of  highways.  The  next  speaker  is 
Mr.  Clyde  Jennings,  Managing  Editor  of  Automotive  Industries,  New  York  City. 

MR.  JENNINGS:  The  other  day,  at  Broadway  and  39th,  I  walked  up  to  a  man 
who  has  been  in  the  automotive  industry  ever  since  it  began,  and  asked  him 
what  he  was  thinking  about.  He  said,  "I  was  just  standing  here  wondering 
how  in  the  world  anybody  ever  got  run  over  before  there  were  automobiles." 
They  did,  quite  a  number  of  them,  and  that  illustrates  how  rapid  our  education 
has  been  in  the  fact  that  some  of  us  have  not  been  run  over. 

We  don't  know  yet  the  fundamentals  of  this  accident  situation.  We  seem 
to  be  in  a  sort  of  a  daze  in  which  we  are  gathering  statistics.  Almost  anything 
that  you  can  put  in  figures  looks  good  and  anything  you  can  draw  a  curve  on 
looks  fine,  and  we  say  that  is  settled;  we  have  got  a  curve.  We  have  a  curve  on 
accidents,  but  we  haven't  got  the  right  one.  Not  long  ago  the  New  York 


26  The  Economics  of  Highway  Transport 

newspapers  were  going  very  strong  on  the  immense  number  of  people  who  were 
killed  in  New  York,  especially  Manhattan,  by  automobiles.  They  had  but  one 
cure,  and  that  was  the  licensing  of  the  operator.  It  was  almost  impossible  to 
get  a  statement  from  them  that  the  proportion  killed  in  New  York  City  was 
smaller  than  in  any  other  city,  and  smaller  than  in  many  country  districts. 
We  finally  got  that  across.  The  Health  Department  of  New  York  City  came 
out  with  that  statement  the  other  day.  I  took  it  up  with  one  of  the  papers 
that  was  crusading  on  accidents  and  a  consideration  of  the  facts  presented  has 
made  that  paper  much  more  reasonable  in  its  treatment  of  the  subject. 

Now  we  need  actual  statistics  in  New  York  and  every  other  community. 
There  was  a  movement  on  foot  to  find  out  when  and  where  the  accidents  hap- 
pened. The  plan  was  to  have  2,000  more  traffic  policemen,  but  where  were 
they  to  be  put?  On  Broadway?  The  accidents  do  not  happen  there.  They 
tried  to  prove  that  they  did,  but  they  didn't.  That  shows  the  public  feeling 
that  accidents  must  happen  where  there  is  the  most  traffic.  That  doesn't 
necessarily  follow.  I  hope  to  get  in  New  York  City  an  examination  into  every 
individual  accident,  as  to  where  and  when  it  happened.  Next  I  want  an 
inquiry  into  each  accident  as  to  why  it  happened.  If  we  can  get  that  informa- 
tion without  arresting  a  man  and  putting  him  on  the  defensive  and  making 
a  liar  of  him,  we  will  have  something  very  interesting.  It  may  be  the  pedes- 
trian's fault,  it  may  be  the  driver's  fault,  or  it  may  be  the  fault  of  the  machine. 

One  of  the  engineers  said  the  other  day  that  the  4-wheel  brake  should  be 
legislated  onto  the  automobile.  Another  said,  "Let  us  first  find  if  we  have  a 
2-wheel  brake."  It  is  a  very  serious  question,  as  to  how  effective  and  how 
well  maintained  the  brakes  are.  I  do  not  know  personally  of  an  instance  where 
after  an  accident  a  proper  examination  has  been  made  of  the  brakes,  steering' 
apparatus,  etc.,  that  are  vital  in  accident  prevention.  It  is  necessary  to  get 
fundamental  figures  and  facts,  things  that  go  back  into  the  cause  of  accident. 
The  road  curve  must  figure  in  the  liability  for  accident.  The  width  of  the  road- 
way is  a  very  important  factor. 

In  seeking  to  prevent  accidents,  an  error  was  made  by  the  State  laws  limiting 
speed.  There  have  been  a  few  judges  big  enough  to  size  up  this  situation  and 
say  that  speed  is  relative.  Six  miles  an  hour  at  one  place  may  be  dangerous, 
and  12  miles  at  another  place  may  not  be  dangerous.  All  these  things  will 
have  to  be  examined  carefully. 

Recently  a  big  element  in  the  safety  problem — I  think  for  the  last  year  or 
two  perhaps  the  biggest  element — has  been  the  almost  criminal  practice  of 
issuing  accident  policies.  You  could  get  accident  insurance  for  anything  and 
any  amount,  and  the  man  who  caused  the  accident  was  not  penalized  or  even 
blacklisted  by  the  insurance  companies.  Now  there  is  a  movement  among 
the  insurance  companies  to  make  the  owner  or  operator  of  the  car  assume  the 
first  |5O  or  $100.  That  is  a  very  good  thing,  it  throws  some  responsibility  back 
onto*  the  operator.  As  long  as  he  could  over-insure  his  car  against  liability, 
which  released  entirely  the  man  who  caused  the  accident  from  any  feeling  of 


The  Economics  of  Highway  Transport  27 

responsibility,  there  has  been  an  increase  of  accidents.  I  know  of  some  per- 
fectly conscientious  men  oh  other  things  who  seem  to  have  no  regard  for  the 
life  of  an  unknown  person  and,  as  to  accidents  to  their  machines,  they  have 
4-year-old  cars  insured  for  the  price  of  new.  This  is  coming  to  a  halt  by  protest 
of  the  people  who  have  to  pay  the  bill.  A  great  many  owners  are  now  carrying 
their  own  insurance  because  of  the  high  price,  and  that  is  due  to  over-freedom 
with  which  insurance  was  issued. 

We  have  been  able  to  demonstrate  in  New  York  that  the  operator  was  much 
more  amenable  to  Jaw  than  the  pedestrian.  The  Fifth  Avenue  experiment  shows 
this.  Remove  the  traffic  policeman  from  the  corner  and  the  operator  will 
drive  up,  and  when  the  light  is  against  him,  three  blocks  away,  he  will  stop. 
The  people  walking  up  and  down  will  weave  in  and  out  of  the  vehicles,  seem  to 
want  to  get  run  over.  Education  should  go  to  the  pedestrian.  I  wouldn't 
advise  letting  up  on  the  operator,  but  I  think  the  educational  course  on  him  is 
working  fairly  satisfactorily.  Accidents  cannot  be  controlled  by  licenses 
entirely.  A  license  is  a  good  thing,  but  you  can't  keep  accidents -out;  they  will 
happen  to  the  most  conscientious  of  drivers.  I  think  a  very  good  thing  would 
be  the  publication  of  a  driver's  code  calling  to  the  attention  of  every  operator 
of  a  machine  that  speed  and  control  of  the  machine  should  always  be  regulated 
by  the  surroundings,  so  that  you  cannot  be  surprised  into  hurting  anybody. 
If  you  are  driving  behind  another  machine,  where  the  people  are  liable  to 
step  out,  you  should  watch  and  be  careful.  A  good  many  would  so  govern 
themselves  if  such  a  thing  were  put  before  them  in  an  effective  way. 

Not  for  a  long  time  will  there  be  any  decrease  in  automobile  transportation. 
It  is  going  to  increase.  It  is  transportation  we  are  talking  about,  and  the  world 
has  never  given  up  a  thing  of  this  kind.  There  have  been  many  statements  and 
loose  figures  to  predict  that  this  year  would  see  a  greatly  lessened  use  of  cars. 
The  mid-year  registration  of  June  30  shows  an  increase  of  something  like  17  per 
cent  in  the  number  of  cars  registered  over  June  30,  a  year  ago,  an  increase  of 
some  46,000  vehicles  over  the  registration  of  December  30.  December  30,  as 
you  know,  is  practically  the  end  of  the  year,  when  they  have  driven  everybody 
into  registering.  In  many  rural  counties  the  machines  are  not  registered  until 
the  crop  money  comes  back.  This  year  any  increase  of  June  30  over  December 
30  is  very  definite  proof  that  people  are  not  giving  up  this  means  of  individual 
transportation. 

DR.  HOWE:  Mr.  John  C.  Long,  Secretary  Education  Department,  National 
Automobile  Chamber  of  Commerce,  New  York  City.  He  is  especially  interested 
in  questions  of  safety. 

MR.  LONG:  At  lunch  time  someone  made  the  remark  that  motor  vehicles 
and  motor  transport  had  grown  so  rapidly  that  the  public  had  not  been  able  to 
keep  pace  with  them.  Perhaps  that  is  best  illustrated  in  the  field  of  accidents 
on  the  highways,  f  he  accidents,  as  we  know,  have  been  growing  steadily 
every  year.  One  encouraging  factor  in  the  situation  is  that  in  relation  to  the 
number  of  motor  vehicles  on  highways  accidents  have  been  growing  less.  In 


28  The  Economics  of  Highway   Transport 

other  words,  the  public  has  been  slowly  catching  up  with  the  problem  in  relation 
to  the  number  of  motor  vehicles  on  the  road.  There  has  apparently  been  a 
gradual  improvement  in  the  way  of  handling  the  thing,  alhough  the  grand  total 
of  accidents  has  increased. 

This  consideration,  however,  will  not  be  particularly  comforting  to  anyone 
who  may  have  lost  someone  in  an  automobile  accident.  The  automobile 
industry-  has  been  concerned  with  the  problem  and  is  anxious  to  encourage 
safety  on  highways.  The  majority  of  accidents  occur  to  children  under  15 
years  of  age;  a  great  majority  of  them  occur  to  pedestrians.  The  Police  Depart- 
ment of  New  York  City  claims  that  78  per  cent  were  due  to  the  carelessness  of 
pedestrians.  That  means  that  a  great  deal  can  be  accomplished  in  the  way  of 
education. 

We  asked  the  help  of  Commissioner  Claxton  of  this  committee  in  giving 
suggestions  as  to  what  might  be  done  to  promote  the  cause  of  safety  education. 
Under  the  direction  of  the  Committee  there  will  be  offered,  this  fall  (October, 
1921),  prizes  in  all  States  to  the  grammar  school  children  for  the  best  essays 
on  how  to  promote  safety  on  highways. 

In  that  way  we  hope  to  bring  to  the  attention  of  all  school  children  in  the 
country  the  thought  as  to  how  they  can  conduct  themselves  on  the  public  high- 
ways in  order  that  these  may  be  made  more  safe.  This  proposition  has  been 
worked  out  very  well  in  some  cities.  Detroit,  St.  Louis  and  certain  other  cities 
carried  on  campaigns  of  safety  education  and  have  found  that  such  campaigns 
have  definite  results  in  bringing  down  the  number  of  accidents  in  the  cities. 
But  with  the  question  of  teaching  the  children  through  these  traffic  campaigns 
and  these  lessons  of  safety  has  come  the  question  of  what  and  how  to  teach 
them,  and  we  find  that  the  material  in  that  field  is  very  scant.  One  well-known 
teacher  of  safety  education  said  she  hardly  knew  what  to  teach,  as  the  field  was 
so  limited.  We  have  accordingly  supplemented  the  school  children  prizes  with 
prizes  for  school  teachers  fcr  the  best  lessons  on  safety  education. 

Now  aside  from  this  class  room  work  there  is  one  other  thought  which  is  well 
illustrated  by  an  incident  which  I  witnessed  on  yth  Avenue,  New  York,  back 
of  the  Metropolitan  Opera  House.  There  was  a  puddle  of  water  and  three 
little  children,  with  long  sticks  and  strings,  were  seated  on  a  beam,  fishing,  while 
taxicabs,  automobiles,  etc.,  whiiled  past.  The  coming  of  the  automobile  has 
meant  that  that  playground  for  children,  the  street,  has  been  taken  away. 
The  highway  is  no  longer  a  safe  place  for  children's  play,  and  along  with  this 
safety  education  should  come  the  promotion  of  playground  work. 

The  automobile  industry  and  those  interested  in  highways  are  endeavoring 
to  emphasize  the  thought  that  in  teaching  children  to  keep  off  the  highways  and 
to  be  careful  in  crossing  the  streets,  adequate  provision  must  be  made  for  play. 
The  largest  factor  in  the  safety  problem  is  the  education  of  children,  and  it  is 
our  hope  and  belief  that  by  hammering  away  at  this  particular  thing,  not  one 
year  but  every  year,  we  shall  bring  up  a  generation  accustomed  to  motor  trans- 
port, who  will  regulate  themselves  accordingly. 


The  Economics  of  Highway  Transport  29 

CHAIRMAN:  The  next  general  topic  is  "Cost  Accounting  in  Highway 
Transport  Operation."  The  discussion  will  be  opened  by  Mr.  George  H. 
Pride,  President  of  the  Heavy  Haulage  Company,  New  York  City. 

MR.  PRIDE:  The  highways  and  the  motor  trucks  which  operate  over  them 
together  form  a  plant  whose  product  is  transportation.  Much  public  discussion 
relative  to  the  subject  of  highways  and  their  construction  has  occurred  in  recent 
years,  but  comparatively  little  has  been  said  about  their  use  after  they  have 
actually  been  built. 

The  public,  as  a  whole,  pays  for  the  construction  and  maintenance  of  the 
highways  in  the  form  of  taxes,  and  although  it  is  not  generally  realized,  it  also 
defrays  the  entire  cost  of  the  motor  truck  transportation  which  passes  over  the 
highways,  in  the  price  it  pays  for  the  commodities  it  buys,  for  it  can  be  un- 
qualifiedly stated  that  practically  everything  purchased  has  been  transported 
by  motor  truck  one  or  more  times  during  its  process  of  fabrication. 

Therefore,  in  order  to  intelligently  approach  the  subject  of  highway  trans- 
portation from  the  economic  standpoint,  it  is  necessary  to  consider  the  motor 
truck  operation  costs,  as  well  as  the  costs  of  constructing  the  highways. 

The  relative  importance  of  truck  operating  costs,  as  compared  with  highway 
construction  costs,  can  perhaps  be  indicated  by  the  following  figures.  The  last 
complete  figures  indicate  that  for  the  year  1919  about  $330,000,000  was  ex- 
pended for  highway  construction.  It  is  reasonable  to  assume  that  the  yearly 
expenditures  for  this  purpose  in  1920  and  1921  will  not  greatly  exceed  this. 
On  January  I,  1921,  there  were  990,000  motor  trucks  operating  over  our  high- 
ways. It  is  conservatively  estimated  that  their  cost  of  operation  exceeds  3^ 
billion  dollars  a  year.  It  can  be  deduced  plainly  that  the  ratio  is  11  to  I,  that 
is,  that  eleven  times  as  much  money  is  spent  in  operating  motor  trucks  over  the 
highways  yearly  as  is  spent  in  building  the  highways  themselves. 

The  figure  of  over  3^  billion  dollars  a  year  for  the  cost  of  motor  truck  opera- 
tion may  be  received  incredulously,  but  I  am  prepared  to  prove  that  this  figure 
errs  from  the  standpoint  of  conservatism. 

From  these  figures  it  must  be  apparent  that,  important  as  is  the  economics 
of  highway  construction,  the  economics  of  motor  truck  operation  involves  at 
least  eleven  times  more  expenditure,  and  as  the  general  public  defrays  both 
these  bills,  the  economics  of  highway  transpcrtation  cannot  be  intelligently 
considered  unless  it  embraces  both  of  the  foregoing,  not  only  individually  but 
also  in  the  light  of  their  relationship  to  each  other. 

A  simile  which  aptly  depicts  highway  transport  is  a  factory,  in  which  the 
factory  building  is  the.  highway,  and  its  product  highway  transportation.  If 
by  constructing  the  building  more  heavily,  or  of  a  more  expensive  design,  it 
would  permit  the  installation  of  more  efficient  machinery,  manifestly  its  product 
could  be  manufactured  more  economically,  within  reasonable  limits.  On  the 
other  hand,  if  an  unnecessarily  high  type  of  building  were  constructed,  which 
did  not  permit  of  the  installation  of  correspondingly  efficient  machinery,  the 
cost  of  the  product  would  be  unnecessarily  high. 


30  The  Economics  of  Highway  Transport 

It  must  be  plainly  apparent,  therefore,  that  the  subject  of  highway  trans- 
port economics  cannot  be  intelligently  dealt  with  until  the  costs  of  highway 
construction,  the  costs  of  motor  truck  operation,  and  their  relationship  to  each 
other  are  determined  with  reasonable  accuracy. 

At  the  present  time  there  is  not  available  any  reliable  cost  accounting  data 
on  truck  operation.  Some  of  the  truck  manufacturers  profess  to  have  data, 
but  I  have  seen  little  of  it  which  would  stand  verification.  It  is  easy  to  see  how 
they  may  innocently  accumulate  misleading  data,  when  it  is  realized  that  this 
information  is  usually  secured  for  the  purpose  of  assisting  their  sales,  and  natu- 
rally it  is  an  accumulation  of  maximums  instead  of  averages. 

The  difficulty  of  securing  this  data  is  still  further  complicated  by  the  fact 
that  motor  trucks  have  usually  been  purchased  and  operated  by  a  class  of  men 
whose  education  and  training  have  been  rudimentary,  rarely  embracing  cost 
accounting.  Even  in  those  instances  where  trucks  have  been  purchased  by  large 
corporations,  little  real  care  and  attention  have  been  devoted  to  their  cost 
accounting,  both  because  there  was  little  precedent  available  for  the  cost  de- 
partment to  use  in  setting  up  the  systems,  and  -also  because  the  trucks  were 
just  a  comparatively  small,  annoying  detail,  not  considered  as  directly  pro- 
ductive to  the  business,  and  usually  under  the  direction  of  an  illy-paid  sub- 
ordinate, whose  mental  attainments  were  not  on  a  parity  with  other  depart- 
mental heads,  having  duties  of  equal  import. 

Fortunately,  however,  there  has  been  developed  a  system  of  truck  cost 
accpunting  which  will  produce  the  necessary  data,  provided  a  sufficient  number 
of  truck  operators  can  be  persuaded  to  truthfully  note  the  comparatively  few 
daily  figures  this  system  requires.  Once  these  figures  are  available  in  sufficient 
quantity,  reasonably  accurate,  general  average  truck  operating  costs  can  be 
determined. 

Not  only  would  this  data  be  extremely  valuable  for  the  foregoing  purpose, 
but  it  would  be  of  infinite  value  to  the  individual  truck  operators,  because 
almost  invariably  the  cost  of  motor  truck  operation  is  greatly  underestimated. 
This  explains  the  extremely  high  percentage  of  failures  among  truck  operators, 
and  also  the  reason  for  so  many  people  entering  upon  and  giving  up  the  business 
of  truck  operation  each  year.  There  is  no  industry  which  compares  in  magni- 
tude with  motor  truck  operation,  where  those  engaged  in  it  possess  so  little 
rudimentary  knowledge  of  its  costs. 

Even  though  highway  transport  has  become  so  firmly  knit  in  the  commercial 
fabric  of  the  country,  it  must  be  acknowledged  that  heavy  motor  truck  line 
transportation  is  being  done  at  a  needlessly  expensive  cost. 

CHAIRMAN:  Mr.  J.  Rowland  Bibbins,  Manager,  Department  of  Transporta- 
tion and  Communication,  Chamber  of  Commerce  of  the  United  States. 

MR.  BIBBINS:  The  subject  allotted  to  me  has  been  very  well  covered  by 
Mr.  Pride  and  I  have  little  to  add.  I  have  drawn  off  in  brief  form  the  attitude 
of  the  Chamber  of  Commerce  of  the  United  States  on  this  subject,  and  I  think 
it  would  be  well  for  you  to  know  what  that  attitude  is.  The  Chamber  of  Com- 


The  Economics  of  Highiuay  Transport  31 

merce,  of  course,  makes  its  statements  to  the  public  through  the  referenda  at  the 
annual  meetings  at  which  four  or  five  thousand  business  men  are  in  attendance. 
The  declarations  at  the  last  two  annual  meetings  are  briefly  as  follows: 

Annual  Meeting,  1919 

"That  highways  are  an  integral  part  of  our  nation's  system  of  Transportation 
has  been  emphasized  by  the  war,  and  an  enormous  development  is  at  hand,  so 
important  as  to  require  a  comprehensive  national  policy,  under  which  federal 
appropriations  for  highways  will  be  applied  to  national  needs  for  interstate 
commerce,  agriculture,  postal  delivery,  common  defense  and  general  welfare. 

"Congress  should  create  a  federal  highway  commission,  independent  of 
present  departments  of  the  government,  composed  of  members  from  the  different 
geographical  sections  of  the  country,  to  perform  all  executive  functions  of  the 
federal  government  pertaining  to  highways,  including  those  relating  to  existing 
appropriations  in  aid  of  state  construction.  Such  a  commission  should  act  in 
coordination  with  any  federal  agency  that  may  have  functions  in  articulating 
rail,  trolley,  water  and  highway  transportation. 

"  Expenditures  of  funds  should  be  permitted  only  for  highways  which  are 
of  a  permanent  type,  having  thorough  drainage,  substantial  foundations, 
sufficient  width,  and  a  capacity  for  traffic  which  will  be  reasonably  adequate  for 
future  needs." 

Annual  Meeting  1921 

"Bonds  should  be  issued  by  states,  territories,  counties  or  municipalities, 
and  federal  assistance  furnished,  only  for  portions  of  highway  construction  which 
are  reasonably  enduring  and  permanent  in  character. 

"Federal  appropriations  should  be  made  only  for  assistance  to  state  and 
territorial  highways  which  will  become  a  part  of  an  interstate  system. 

"Federal  assistance  should  be  continued  only  to  those  states  and  territories 
which  adequately  maintain  highways  for  which  there  has  been  federal  aid. 

"Most  careful  study  should  be  made  by  the  Federal  Government  in  co- 
operation with  state  governments  as  to  routes,  the  probable  character  of  service 
over  such  routes,  and  the  best  form  of  construction  to  meet  such  service.  These 
studies  should  include  ultimate  economies  of  location  and  design." 

The  above  declarations  were  made  at  the  last  two  annual  meetings  of  the 
National  Chamber  of  Commerce,  which  were  attended  by  delegates  from  the 
Chamber's  membership  comprising  from  1,400  to  1,500  commercial  and  trade 
organizations,  16,000  associate  and  individual  members,  and  reflecting,  directly 
or  indirectly,  the  views  of  nearly  1,000,000  business  men  of  America.  These 
conclusions  were  reached  in  view  of  the  necessity  for  a  continued  and  well- 
defined  Highway  Policy  in  the  national  interest.  And  in  order  that  funds 
hereafter  spent  for  highway  construction  should  adequately  serve  the  economic 
purposes  which  are  just  becoming  recognized,  it  was  the  opinion  of  these  two 
Conventions  that  the  principles  above  enunciated  should  govern. 


32  The  Economics  of  Highway  Transport 

Certain  important  points  of  contact  with  the  expressed  purpose  of  this 
conference  today  may  be  noted: 

1.  That  physical  and  economic  research  is  definitely  favored,  not  only  with 
respect   to   adequacy   and   permanency  of  construction  and  capacity  for  the 
service  to  be  rendered,  but  also  with  due  regard  to  the  needs  of  the  future  and  to 
economic  location,  design  and  operation. 

2.  That  the  articulation  of  various  transportation  systems,  of  which  high- 
ways play  an  important  part,  should  form  one  of  the  very  definite  purposes  of 
that  national  agency  which  is  to  be  clothed  with  the  powers  and  responsibilities 
of  adequate  highway  development  on  a  national  scale. 

These  studies  and  responsibilities  are  obviously  of  primary  importance  and 
should  not  be  undertaken  in  a  spirit  of  contention  or  localism.  The  National 
Chamber  sincerely  believes  that  the  principles  it  has  set  forth  are  fundamental 
and  above  local  interpretations. 

Obviously  education  must  play  an  important  part,  and  the  whole  research 
idea  is  only  one  phase  of  education,  viz:  to  determine  the  scientific  and  economic 
facts.  The  National  Chamber  is  deeply  interested  in  all  worthy  educational 
movements. 

If  it  were  possible  to  stress  particular  phases  of  the  general  topic  of  the 
day,  there  might  be  mentioned  the  following: 

1.  Operating  economics. 

2.  Cost  accounting. 

3.  The  public  good. 

The  first  two  are  based  upon  the  conception  of  Highway  Transport  as  a 
purely  business  enterprise,  standing  squarely  on  its  own  feet  on  a  true  cost-of- 
service  basis,  just  as  a  railroad,  steamship,  lighting  or  manufacturing  business 
is  conducted.  Is  it  not  imperative,  first  and  foremost,  to  know  all  of  the  ele- 
ments of  the  cost  of  highway  transport  without  reservations  or  distinctions? 
Only  a  full  scientific  cost  accounting  will  reveal  the  whole  facts.  I  cannot  help 
but  think  of  the  excellent  systems  worked  out  by  the  Interstate  Commerce 
Commission  and  by  the  State  Utility  Commissions.  A  parallelism  can  very 
readily  be  drawn  with  this  new  transportation  industry.  Why  do  we  not  start 
on  somewhat  the  same  plan  ?  All  of  the  necessary  elements  of  cost  are  listed 
in  these  standard  classifications. 

As  to  the  public  good,  must  we  not  make  up  our  minds,  and  that  promptly, 
to  face  the  question  of  public  subsidies  and  call  them  by  their  right  names? 
In  other  words,  the  national  issue  ought  to  be  foremost  in  highways,  as  it  is 
in  shipping  and  other  branches  of  industry,  viz:  what  part  of  the  service  is  in 
the  public  interest  and  therefore  to  be  supported  by  the  whole  people  in  the 
great  common  interest? 

There  is  one  suggestion  on  the  matter  of  safety.  Every  driver  should  be 
examined  every  year  prior  to  the  granting  of  a  license  to  prove  his  or  her  ability 
to  handle  the  car.  We  should  not  carry  insurance  to  cover  all  of  our  carelessness. 

CHAIRMAN:  Professor  J.  Gordon  McKay  of  the  University  of  Wisconsin, 
Economist  of  the  Bureau  of  Public  Roads. 


The  Economics  of  Highway  Transport  33 

PROFESSOR  McKAY:  One  of  the  principal  difficulties  in  the  field  of  highway 
research  is  the  absence  of  reliable  information  on  many  of  the  unsolved  problems 
confronting  the  highway  economist  and  engineer.  The  rapid  growth  of  road 
construction  and  the  changing  character  and  volume  of  the  traffic  since  1916 
are  largely  responsible  for  the  lack  of  accurate  and  extensive  information. 

Three  types  of  highway  cost  data  are  essential:  First,  studies  of  construc- 
tion costs;  second,  maintenance  costs;  and  third,  vehicle  operation  costs. 

A  great  deal  of  information  is  available  as  to  the  cost  of  building  the  several 
types  of  highways.  The  original  cost  alone  is  not  the  determining  factor,  but 
the  original  cost,  compared  with  the  maintenance  charge,  is  one  of  the  deter- 
minants in  selecting  the  most  economical  road  type.  We  must  have  highway 
maintenance  costs  on  concrete,  macadam,  gravel,  and  dirt  roads  to  intelligently 
approach  the  problem  of  highway  valuation.  Maintenance  studies  to  be  of  real 
value  must  be  continuous  over  a  period  of  time  long  enough  to  offset  changes  in 
the  price  of  materials  and  labor  and  the  change  in  traffic.  A  year's  study  may 
be  of  little  worth  two  years  later,  and  it  is  only  though  a  system  of  cost  keeping, 
which  records  construction  and  maintenance  each  year,  that  we  can  hope  to  get 
accurate  data. 

The  third  classification  of  cost  information  deals  with  the  problem  of  vehicle 
operation  costs.  This  is  the  hardest  research  problem  of  the  group.  The 
unreliability  and  scarcity  of  information  make  it  imperative  that  extensive 
vehicle  operation  cost  studies  be  made  by  disinterested  investigators. 

An  intelligent  approach  to  the  problem  of  the  service  value  of  any  given 
highway  requires  cost  data  on  construction,  maintenance  and  vehicle  operation 
costs  under  the  same  conditions  of  traffic  and  on  the  same  road  types.  While 
a  comparison  may  be  made  between  the  construction  cost  and  the  maintenance 
charges  of  concrete,  macadam,  gravel  or  dirt  roads,  we  cannot  arrive  at  any 
conclusions  as  to  service  value  of  each  type  without  knowing  the  saving  in 
vehicle  operation  costs  of  the  improved  over  the  unimproved  road.  A  compre- 
hensive survey  of  vehicle  operation  costs  on  each  of  the  several  road  types  is 
necessary  before  we  can  make  use  of  construction  and  maintenance  data  in  the 
evaluation  of  a  stretch  of  highway.  After  all  it  is  not  alone  the  question  of 
original  cost  and  maintenance,  but  the  savings  due  to  improvement  in  vehicle 
operation  which  is  one  of  the  principal  factors  in  the  justification  of  the  type  of 
construction. 

To  summarize,  research  studies  must  be  planned  and  immediately  started 
to  obtain  construction,  maintenance  and  vehicle  operation  costs  on  the  several 
types  of  highways  before  even  an  approximation  of  the  service  value  of  a  high- 
way can  be  made. 

CHAIRMAN:  "National  and  State  Legislation"  will  next  be  discussed  by  Mr. 
A.  N.  Johnson,  Dean  of  Engineering,  University  of  Maryland. 

DEAN  JOHNSON:  The  question  of  highway  legislation  I  shall  attempt  to 
discuss  purely  from  a  university  and  academic  side,  the  educational  phase  of  it. 
The  highway  engineers  are  the  ones  who  operate  under  the  highway  laws,  and, 


34  The  Economics  of  Highway  Transport 

in  the  majority  of  instances,  probably  the  first  ones  to  realize  where  a  particular 
law  is  a  misfit,  where  it  could  have  been  changed  to  advantage,  to  offer  a  chance 
for  better  methods  of  handling  the  work  and  with  more  satisfaction  to  the  public. 
It  seems  to  me,  therefore,  that  it  is  essential  to  include  in  the  studies  that  an 
engineer  should  have,  if  he  expects  to  get  into  highway  work,  the  elements,  at 
least,  of  legislation,  particularly  highway  legislation.  The  average  engineering 
student  is  appalled  usually  when  he  has  to  interpret  or  to  read  a  statute.  That 
is  something  quite  foreign  to  him.  The  mere  reading  of  the  laws,  with  under- 
standing, would  in  itself  furnish  a  great  deal  of  valuable  instruction  in  highway 
legislation.  It  could  well  be  carried  further  and  amplified  by  studying  highway 
legislation  in  a  way  similar  to  the  study  of  specifications,  for,  after  all,  the  legis- 
lation is  but  a  step  from  the  specification.  Specifications  must  be  drawn  within 
the  limitations  of  the  laws  under  which  the  work  is  to  be  done.  And  there  is  no 
reason  why  the  student  who  later  may  operate  under  these  laws  should  not  be 
made  familiar  with  the  law  itself  and  be  able  intelligently  to  draw  up  and  pre- 
pare a  bill  in  such  form  that  he  can  operate  under  it  efficiently.  Yet,  there  are 
few  engineering  students  that  have  received  preparation  along  this  line.  I 
think,  like  myself,  most  of  the  engineers  in  highway  work  who  have  had  to  do 
this  have  been  thrown  up  against  it  and  have  groped  in  the  dark.  It  is  the 
hardest  and  most  expensive  way  possible  to  educate  themselves;  whereas  a 
little  guidance  in  their  student  years  would  have  saved  them  an  immense 
amount  of  hard  work  and  a  good  many  regrets. 

In  the  study  of  Highway  Legislation,  there  is  first  required  an  analysis  or 
outline  of  what  the  subject  comprises.  Such  an  outline  is  presented,  which 
represents  the  result  in  part  of  an  exhaustive  study  of  the  statutes  of  each  state. 
This  outline  was  prepared  to  show  a  logical  sequence  of  the  subjects  found  in 
legislation: 

GENERAL  OUTLINE  OF  HIGHWAY  LEGISLATION 
Article  I — General  Clauses 

1.  Short  Title. 

2.  Definitions. 

3.  Classification. 

Article  II — Establishment  of  Highways 

1.  By  Adoption. 

2.  By  Creation. 

Article  III — Control  of  Highways  (By  the  Public] 
i.  Organization  and  Administration — 
A.  State  Highway  Control. 

(a]  State  Highway  Department: 
Establishment. 


The  Economics  of  Highway  Transport  35 

(b)  State  Highway  Commission: 

How  Appointed. 

Qualifications. 

Tenure  of  Office. 

Removal. 

Salary. 

Powers  and  Duties. 

(c)  State  Highway  Engineer: 

How  Appointed. 

Qualifications. 

Tenure  of  Office. 

Removal. 

Salary. 

Powers  and  Duties. 

(d)  Other  Employees: 

Under  Control  of  State  Highway  Engineer. 
Civil  Service  Requirements. 

B.  County  Highway  Control. 

(a)  County  Boards: 

Powers  and  Duties  (relating  to  highways). 

(b)  County  Highway  Engineer: 

How  Appointed. 

Qualifications. 

Tenure  of  Office. 

Removal. 

Salary. 

Powers  and  Duties. 

(c)  Other  Employees: 

Under  Control  of  County  Highway  Engineer 
Civil  Service  Requirements. 

C.  Town  or  Township  Highway  Control. 

(a)  Township  Board: 

Powers  and  Duties  (relating  to  highways). 

(b)  Township  Highway  Superintendent. 

How  Appointed. 
Qualifications. 
Tenure  of  Office. 
Removal. 
Salary. 

Powers  and  Duties. 
(c}  Other  Employees: 

Under  Control  of  Township  Highway  Superintendent. 
Civil  Service  Requirements. 


36  ^        The  Economics  of  Highway   Transport 

2.  Road  Work— 

A.  State: 

(a)  State  Highway  System  (How  Established  or  Defined). 

(b)  Procedure  Preliminary  to  Construction. 

(c)  Provisions  Controlling  Construction: 

Procedure  for  Letting  Contracts. 

Payments,  Bonds  Required. 

Day  Labor  Work  Permitted 
(//)  Maintenance. 
(<?)  Funds. 

B.  County: 

(a)  General  Road  Work. 

(b)  Special  Road  Work. 

(c)  Funds. 

C.  Township: 

(a)  General  Road  Work. 
(V)  Special  Road  Work. 
(c}  Funds. 

D.  Special  Highway  Improvement  Districts: 

(a)  Preliminary  Procedure  to  Establish. 

(b)  Construction. 
(c}  Maintenance. 

(d)  Funds. 

^.  Bridge  Work— 

A.  State: 

(a)  Procedure  Preliminary  to  Construction. 
(b}  Construction. 

(c)  Funds. 

B.  County: 

(a)  Procedure  Preliminary  to  Construction. 

(b)  Construction. 

(c)  Funds. 

C.  Township: 

(a)  Procedure  Preliminary  to  Construction. 

(b)  Construction. 

(c)  Funds. 

4..  General  Labor  and  Contract  Provisions — 

(a )  Free  Labor. 

(b)  Convict  Labor. 

(c)  Contracts. 


The  Economics  of  Highway  Transport  37 

Article  IV — Control  of  Highways  (By  Toll  Companies] 
i.  Toll  Roads,  Toll  Bridges,  Toll  Ferries. 
A:  How  Established. 

B.  Duties  of  Owners. 

C.  Rates  of  Toll— How  Regulated. 

D.  Supervision  and  Control  by  Public  Officers. 

E.  How  Abandoned. 

Article  V — Use  of  Highways 

1 .  By  General  Public — 

A.  Traffic  Regulations: 

1.  Law  of  the  Road. 

2.  Speed. 

3.  Load  Limitations. 

4.  Vehicle  Licenses  and  Regulations. 

(a)  Motor  Vehicles. 

(b)  Traction  Engines. 
(c}  Other  Vehicles. 

B.  Offenses  and  Penalties: 

1.  Obstruction  in  Highways. 

2.  Injuries  to  Highways. 

C.  Damages  Sustained  by  Persons. 

2.  By  Abutting  Owners — 

A.  Privileges  Along  the  Road: 

1.  Entrances. 

2.  Sidewalks. 

3.  Trees  and  Hedges. 

4.  Water  Troughs 

5.  Advertising  Signs. 

6.  Itinerants  Camping 

B.  Privileges  Across  the  Road: 

1.  Gates  Across  Road. 

2.  Cattle  Passes. 

3.  By  Corporations  and  Utilities — 

(a)  Railroads. 

(b}  Poles  for  Electric  Wires. 

(c}  Pipes  and  Conduits. 

(d)  Canal  and  Irrigation  Ditch  Crossings. 

(e)  Mining  Operations  Under  Highway. 

Article  VI — Saving  and  Repeal  Provisions 


The  foregoing  would  be  the  undergraduate  phase  of  highway  legislation. 
There  is  a  very  wide  field  open  in  graduate  work.     I  should  say,  however,  that 


38  The  Economics  of  Highway   Transport 

it  is  more  for  students  other  than  engineering  students.  For  example,  there 
could  be  a  comprehensive  collection  of  the  highway  laws  of  the  states,  arranged 
to  bring  out  certain  features  or  laws  bearing  on  a  certain  phase  of  highway  work 
that  could  be  compared  as  they  exist  in  the  various  States.  Many  of  you  are 
familiar  with  the  very  interesting  little  book,  "The  King's  Highway,"  by  Sydney 
and  Beatrice  Webb,  where  a  great  deal  of  material  has  been  gotten  from  the 
old  English  laws  governing  highways.  One  of  the  most  interesting  chapters 
in  the  first  report  on  Maryland  highways  was  that  on  the  history  of  the  old 
roads  chiefly  gleaned  from  the  old  Colonial  acts  and  the  earlier  acts  of  the 
Maryland  legislature,  bringing  out  in  a  most  interesting  manner  the  development 
of  the  highways  and  the  highway  systems.  That  was  written  as  a  thesis  for 
the  doctor's  degree  in  history,  and  while  these  may  not,  perhaps,  be  topics  for 
the  engineering  students,  they  offer  a  wide  field  for  graduate  work  in  other  than 
engineering  lines. 

CHAIRMAN:  Our  next  talk  will  be  by  Mr.  William  A.  Bassett,  Chief  of  the 
Engineering  Division  of  the  National  Institute  of  Public  Administration,  New 
York. 

MR.  BASSETT:  Our  organization  has  been  established  for  the  purpose  of 
carrying  on  educational  work  in  the  field  of  public  administration.  For  the 
past  ten  or  fifteen  years  its  predecessor,  the  New  York  Bureau  of  Municipal 
Research,  carried  on  advisory  service  to  various  governmental  units  throughout 
this  country  in  matters  of  municipal  administration.  One  result  of  that  work 
was  to  show  the  need  for  educating  not  alone  the  official  identified  with  public 
administration  but  most  of  all  the  public,  and  in  recognition  of  that  need  our 
present  institution  was  established  this  year. 

There  are  three  phases  to  the  work  in  which  we  are  engaged.  The  first 
phase  is  education  of  the  individual.  This  phase  preferably  should  come  within 
the  scope  of  existing  educational  institutions.  We  have  had  it  forced  upon  us 
to  a  certain  extent  on  account  of  the  demand  for  men  in  public  service,  city 
managers  for  instance,  and  in  allied  fields  such  as  secretaries  of  chambers  of 
commerce,  individuals  who  are  not  dealing  with  the  technique  of  professional 
work  but  the  technique  of  government.  Sometime  ago  I  communicated  with 
Professor  Tilden  on  this  matter,  the  idea  being  that  possibly  some  work  in 
highway  administration  might  be  started.  I  was  not  aware  at  the  time  of  the 
character  of  work  being  done  by  this  committee,  although  in  a  general  way  I 
knew  what  was  being  done  in  highway  education  by  educational  institutions 
throughout  the.  country.  This  knowledge  led  me  to  believe  that  they  were 
not  meeting  the  need  for  training  in  highway  administration.  This  applies 
particularly,  as  brought  out  by  Dean  Johnson,  to  the  consideration  of  matters 
relating  to  legislation  and  the  effect  of  ill-advised  legislation  on  highway  work. 
Recognizing  what  is  being  done  by  the  committee  on  highway  and  highway 
transport  education,  and  the  other  representatives  attending  this  conference, 
I  would  like  to  state  that  our  organization  is  ready  to  cooperate  in  any  way 
for  furthering  this  work.  Professor  Hatt  outlined  its  scope  most  clearly  and 


The  Economics  of  Highway   Transport  39 

also  emphasized  the  necessity  for  coordination  in  the  field  of  research.  The 
value  of  that  is  obvious,  and  we  wish  to  feel  that  possibly  we  may  be  an  aid  in 
furthering  educational  work  in  highway  administration. 

DR.  HOWE:  Mr.  Roy  D.  Chapin,  President  of  the  Hudson  Motor  Car 
Company  of  Detroit. 

MR.  CHAPIN:  I  am  going  to  confine  myself  absolutely  to  the  question  of 
national  highway  legislation. 

Out  of  this  meeting  as  much  as  any  meeting  I  have  ever  attended  has  come 
a  demonstration  of  the  fact  that  there  are  many  problems  that  cannot  be 
treated  from  a  state  or  local  standpoint  but  must  be  treated  nationally.  Is  it 
a  proper  function  for  the  Federal  Government  to  study  these  problems?  We 
have,  as  has  been  pointed  out,  an  economic  interest  in  the  use  of  the  highway 
which,  so  far  as  the  billions  of  dollars  are  concerned,  is  much  more  important 
than  the  actual  cost  of  the  highways.  The  time  has  come  when  the  economic 
interest  of  each  state,  each  community  and  the  nation  in  the  subject  of  roads 
far  transcends  the  mere  problem  of  construction  and  maintenance. 

The  President  yesterday  in  his  message  to  Congress  devoted  a  great  deal  of 
attention  to  the  situation  of  the  railroads,  realizing  that  the  prosperity  of  this 
country — and  we  are  all  concerned  in  this — is  vitally  tied  up  in  the  prosperity 
of  the  railroads.  It  is  time  this  nation  assumed  its  own  responsibility  in  con- 
nection with  the  prosperity  of  highways  and  highway  transport.  The  annual 
cost  of  operation  of  motor  vehicles  today  is  certainly  between  four  and  six 
billion  dollars,  an  amount  probably  equal  to  the  annual  expenditure  for  railroad 
transportation.  That,  as  you  can  see,  is  considerably  in  excess  of  the  amount 
spent  for  building  highways.  Registration  of  motor  vehicles  is  at  present 
around  ten  million.  The  tendency  over  the  next  five  yea»s  in  the  cost  of  motor 
vehicles,  both  passenger  and  truck,  is  going  to  be  lower.  That  being  so,  you 
are  going  to  have,  not  a  registration  of  ten  million,  but  a  registration  by  .1925 
of  fifteen  million  or  possibly  more,  a  50  per  cent  increase  in  the  use  of  our  high- 
ways. That,  I  submit  to  you,  is  a  problem  of  vital  concern  to  the  United  States 
Government  because  no  state  can  regulate,  can  investigate  and  can  serve  this 
country  as  a  state  except  as  it  functions  with  the  Government  in  this  tremendous 
problem. 

Our  governmental  legislation  from  an  administrative  standpoint  should 
recognize  this  tremendous  change  that  has  taken  place  over  the  last  five  or  ten 
years,  and  the  fact  that  no  longer  is  this  a  purely  engineering  problem.  The 
Government  today  has  the  responsibility  to  help  research  work  on  highways  and 
highway  transport  throughout  this  country,  to  help  coordinate  it.  The  Govern- 
ment should  be  the  central  tying-in  place  because  the  Government  has  funds  to 
spend.  It  is  responsible  through  these  funds  to  each  taxpayer  in  the  country. 
We  have  as  yet  a  very  poorly  connected  system  of  highways.  France  has  set 
a  pace  for  us.  It  doesn't  make  any  difference  whether  it  is  a  highway  or  a  dirt 
road,  you  drive  on  a  good  road  anywhere  in  France.  That  time  is  coming  in 
this  country  and  coming  fast.  The  billions  of  dollars  we  are  spending  on  hieh- 


40  The  Economics  of  Highway   Transport 

ways  will  create  a  similar  condition  here.  The  Government  has  a  great  re- 
sponsibility in  directing  the  expenditure  of  these  funds.  Certainly  a  central 
authority  in  Washington,  in  touch  with  every  state  and  every  unit,  is  going  to 
help. 

The  relation  of  the  rail  and  the  waterway  to  the  highway  have  never  been 
set  out  satisfactorily,  and  it  is  going  to  take  time  to  do  it.  Uniform  laws  are 
of  the  utmost  importance.  We  go  from  state  to  state  with  different  regulatory 
laws.  Two  licenses  are  required  to  operate  between  Maryland  and  the  District 
of  Columbia.  The  question  of  safety,  of  saving  human  lives,  which  has  been 
brought  out  so  well  today,  is  one  in  which  the  Government  is  particularly 
interested. 

The  time  has  come  when  federal  legislation  must  be  passed  which  will 
recognize  the  importance  of  highways  and  highway  transport  and  the  responsi- 
bility that  this  Government  has  to  the  people.  The  time  has  come  when  we 
must  look  at  this  question  not  purely  from  the  standpoint  of  locality,  not  from 
the  standpoint  of  building  of  roads,  but  from  the  standpoint  of  transportation. 

CHAIRMAN:  We  have  listened  to  a  number  of  very  important  and  interesting 
papers  and  now  the  question  comes:  What  is  the  next  step?  It  has  been 
suggested  that  we  try  to  determine  the  most  important  things  in  this  matter  of 
highways  and  highway  transport  so  that  this  information  may  be  available  for 
the  committee  which  called  this  meeting  and  for  other  committees  working  in 
the  same  field.  I  am  going  to  ask  Mr.  A.  M.  Loomis,  of  the  National  Grange, 
to  say  a  few  words  on  this  question. 

MR.  LOOMIS:  There  is  one  thing  which  seems  to  me  of  some  importance. 
I  believe  it  hooks  up  particularly  with  the  research  work  to  be  done  in  the  field 
of  economics  dealing  with  financing  highway  construction.  The  farmers  of 
the  country  are  in  some  ways  the  people  most  intimately  connected  with  the 
highway  problem,  and  of  those  farmers  and  their  families  there  are  some  35,000,- 
ooo,  about  a  third  of  the  population  of  the  country.  It  forms  a  large  block,  and 
to  get  legislation  you  have  to  have  votes.  That  is  one  of  the  basic  things  we 
learn  in  Washington.  There  has  been  a  great  misapprehension  in  the  minds  of 
the  people  who  have  been  earnestly  and  sincerely  back  of  the  good  roads  move- 
ment, as  to  the  influence  and  effect  of  that  movement  on  farms  and  farmers. 
It  has  been  largely  due  to  errors  of  economic  thinking. 

For  instance,  my  grandfather's  farm  is  still  in  the  family  in  western  New 
York,  and  recently  a  good  road  has  been  built  by  that  place.  It  has  not  in- 
creased the  value  of  the  farm  or  the  productivity,  nor  has  it  made  any  material 
economic  change  in  the  condition  of  the  man  on  that  farm.  That  is  rather  a 
broad  statement;  perhaps  I  am  putting  too  much  emphasis  on  it,  but  in  general 
that  is  the  state  of  mind. of  the  farmer  toward  the  good  road.  He  wants  to  be 
shown  what  he  is  going  to  get  out  of  it.  That  leads  to  the  economic  question 
involved,  the  question  of  financing,  of  how  the  money  is  to  be  raised  and  where 
it  is  to  come  from.  The  economies  of  good  roads,  hard  surfaced  highways  and 
cheaper  transportation  is  the  economy  in  the  final  marketing  price.  The  place 


The  Economics  of  Highway  Transport  41 

where  the  farmer  benefits  from  the  good  roads,  excepting  in  imponderables,  is 
chiefly  in  that  which  he  hauls  to  his  farm  over  the  road  instead  of  that  hauled 
from  the  farm  to  the  market.  And  that  is  not  a  very  big  item  in  his  year's 
business.  I  haven't  a  great  deal  of  reliance  in  my  mind  on  the  farm-to-market 
highway.  I  don't  believe  much  in  that  phrase  or  what  it  means.  The 
consumer  is  interested  in  that,  but  not  the  farmer.  There  is  a  great  deal 
of  misthinking  and  misunderstanding  and  misapprehension  about  all  those 
things. 

The  money  which  must  be  raised  for  highway  construction  must  be  appor- 
tioned as  nearly  as  is  humanly  possible  so  that  the  cost  of  improvement  is 
assessed  in  proportion  to  benefits  derived,  and  that,  I  am  afraid,  has  not  been 
very  largely  the  state  of  legislation  enacted  in  the  past,  and  that  is  the  reason 
for  the  farmer's  present  state  of  mind.  The  great  authorities  point  out  con- 
vincingly the  burden  of  taxation  that  rests  on  farm  property.  That  is  due  to 
the  fact  that  the  farmer's  property  is  easily  seen  and  easily  taxed.  Burdens  of 
taxation  are  rather  leaned  over  on  the  farmer,  and  the  high  costs  of  highway 
building,  owing  to  this  situation,  have  been  naturally  divided  in  that  way.  If 
there  is  one  single  reason,  that  is  why  the  National  Grange  was  friendly  to  the 
original  Townsend  Bill  for  construction  of  a  national  system  at  national  ex- 
pense. That  is  a  way  to  build  highways  which  fairly  and  equitably  divides 
cost  of  improvement  in  proportion  to  benefits  derived. 


The  time  for  general  discussion  was  limited,  but  following  are  the  more 
important  points  which  were  brought  out. 

DEAN  JOHNSON:  I  think  we  have  been  impressed  by  the  fact  brought  out 
by  several  speakers  as  to  lack  of  certain  data  relating  to  elemental  costs  of 
highway  transportation.  We  cannot  have  such  data  without  first  answeiing 
the  question:  What  is  highway  transportation?  In  other  words,  one  of  the 
most  important  topics  for  immediate  study  is  the  traffic  census.  Find  out  how 
much  we  are  using  our  roads,  how  and  where  we  are  using  them.  We  must 
develop  as  soon  as  possible  a  method  of  taking  traffic  census  that  will  give  us 
these  data  and  have  them  actually  gathered.  A  little  study  shows  how  meager 
existing  traffic  data  are.  Now  and  then  a  State  takes  a  census  during  one  day. 
There  is  a  traffic  map  of  New  York  State  taken  one  day  during  August,  and 
that  is  immensely  valuable  in  showing  what  we  haven't  got.  We  must  know 
the  fundamental  facts  of  how  much  we  use  our  roads  before  we  can  make  any 
estimate  as  to  the  value  we  are  getting  from  them. 

PROFESSOR  HATT:  From  the  standpoint  of  research  I  am  especially  interested 
in  education.  I  hope  this  committee  will  not  cease  its  endeavors  before  it 
accomplishes  what  seems  to  me  an  important  part  of  its  work,  namely,  sug- 
gestions to  colleges  as  to  what  they  might  do  in  the  study  of  highway  economics. 
Professors  of  economics  are  perhaps  not  interested;  they  do  not  see  the  impor- 
tance of  it.  Their  students  study  money  and  banking  and  things  of  that  kind 
but  there  are  few  courses  in  transportation.  The  leal  need  just  now  seems 
to  be  to  impress  teachers  of  economics  with  the  live  need  for  constructive 


42  The  Economics  of  Highway   Transport 

thinking  along  these  lines.  They  cannot  do  effective  teaching  until  they  get 
the  necessary  data  and  the  whole  problem  before  them. 

MR.  PRIDE:  I  recommend  that  we  determine  upon  one  of  the  present 
methods  of  cost  accounting,  give  it  our  approval,  send  it  to  various  colleges 
that  have  economics  departments  and  that  might  be  interested  in  securing  data 
based  on  that  plan,  asking  them  to  transmit  the  results  they  secure  to  us. 
That  will  allow  us  to  collate  it  in  one  final  total. 

MR.  BIBBINS:  I  would  reiterate  the  relation  of  the  highways  to  other 
methods  of  transportation.  The  attempt  to  define  the  coordination  of  various 
transportation  facilities  is  an  attempt  to  get  light  upon  what  we  mean  by  the 
public  good  with  reference  to  highway  transport — that  is,  an  allocation  of  the 
ultimate  burden. 

DR.  WALTON  C.  JOHN,  U.  S.  Bureau  of  Education:  I  might  call  attention 
to  the  possibility  of  making  a  study  of  safety  and  safety  teaching  in  the  public 
schools  through  the  Bureau  of  Education  and  the  Highway  and  Highway 
Transport  Education  Committee.  A  preliminary  investigation  indicates  that 
there  are  valuable  data  in  many  of  the  leading  schools  which  would  furnish 
useful  material  for  those  who  are  interested  in  propaganda  regarding  safety  work. 
We  can  save  25,000  lives  a  year  by  putting  into  general  operation  what  Detroit 
is  doing. 

PROFESSOR  TILDEN:  The  discussion  here  today  will  be  of  value  to  the  com- 
mittee in  making  concrete  suggestions  for  the  development  of  educational 
work.  There  Jiave  also  been  suggested  a  number  of  topics  for  research. 

In  colleges  and  universities  we  have  two  distinct  groups.  There  is  the  under- 
graduate— that  is,  the  high  school  boy  who  in  four  years  is  to  be  given  some 
idea  of  his  responsibility  as  a  productive  citizen  and  headed  in  the  direction 
of  useful  work.  Then  there  is  the  graduate  student,  whose  chief  interest  is 
research.  For  the  first  group  we  need  carefully  organized  courses  of  study, 
planned  especially  to  stimulate  the  imagination  and  develop  intellectual  power. 
Not  long  ago  I  asked  one  of  the  leading  economists  in  this  country,  a  professor 
at  a  large  eastern  university,  why  the  university  had  no  courses  in  highway 
economics.  His  reply  was  that  it  would  take  five  years  to  so  coordinate  and 
correlate  even  the  facts  that  we  already  know  about  highway  economics  that 
they  might  profitably  be  presented  to  an  undergraduate  body.  It  seems  a 
needlessly  pessimistic  view  to  take.  Think  of  the  additional  material  that  will 
accumulate  in  the  next  five  years! 

The  outline  of  the  field  of  highway  research  which  Dr.  Hatt  has  given  us 
is  most  suggestive  and  stimulating.  From  it  many  topics  may  be  chosen  for 
graduate  study  and  investigation,  for  students  working  either  singly  or  in  groups, 
or  for  more  mature  investigators  in  engineering  and  economics. 

MR.  CHAPIN:  It  is  fitting  that  before  we  leave  today  a  vote  of  thanks  be 
extended  to  the  University  of  Maryland,  to  President  Woods  and  to  Dean 
Johnson  for  their  great  hospitality  to  the  conference. 

The  motion  was  passed  by  a  rising  vote,  after  which  the  chairman  declared 
the  meeting  adjourned. 


The  Economics  of  Highway  Transport  45 

Mr.  H.  G.  McGee,  Bureau  of  Municipal  Research,  Akron,  Ohio  (by  letter, 
after  the  conference):  The  thing  we  all  need  and  are  groping  for  in  different 
ways  is  a  consolidated  financial  statement  of  this  business  of  highway  trans- 
port. Most  of  our  suggestions  and  figures  have  centered  about  individual 
elements  in  this  business,  of  how  to  arrive  at  costs,  of  safety,  of  financing. 
Each  is  significant  and  essential.  But  we  need  to  see  the  whole,  the  woods  as 
well  as  the  trees. 

With  such  a  consolidated  statement  it  seems  to  me  that  many  of  our  per- 
plexing and  disputed  questions  of  policy  may.  answer  themselves  almost  auto- 
matically. Suppose  we  attempt  to  set  up  a  statement  for  one  division  of  this 
highway  transport  business,  that  of  highway  improvement.  Our  balance 
sheet  might  look  something  like  this: 

Assets  and  Liabilities  of Improvement  as  of 192__ 


ASSETS 

1.  Investment  in  construction  of  improvement 

2.  a.  Benefits  to  suburban  traffic 

Less  road  payments  by  suburban  traffic 


Net  benefits  to  suburban  traffic 

b.  Benefits  to  farms 

.Less  road  assessments  and  additional  taxes. 


Net  benefits  to  farms 

c.   Benefits  to  through  and  other  traffic.  .  .  . 
Less  general  property  taxation,  tolls,  etc. 


Net  community  benefit. 


Net  benefit  of  improvement. 
3.  Cash  and  other  resources. . . 


4.  Total  assets .  . 


LIABILITIES 

1.  Bonds  outstanding $. 

2.  Depreciation  reserve. 

3.  Deferred  maintenance ; 

4.  Proprietorship  (investment  from  income) 

5.  Surplus 


6.  Total  liabilities,  proprietorship  and  surplus. 


44  The  Economics  of  Highway  Transport 

Such  an  application  of  the  standard  business  test  would  give  a  statement 
of  the  real  status  of  a  road  improvement  at  any  particular  time.  But  we  will 
also  be  interested  in  discovering  how  we  arrived  at  the  particular  position 
indicated  by  the  balance  sheet.  This  may  be  determined  from  an  annual 
operating  statement  which  might  look  something  like  this: 

Profit  and  Loss  on Improvement  for  Year  Ending 192__ 

REVENUES 

Sales  (Cost  of  equivalent  transportation  services  over  unimproved  highways 
or  by  other  agencies,  as  rail  or  water,  minus  cost  of  actual  transporta- 
tion services  over  improvement). 

a.  Benefit  to  suburban  traffic ? 

£.  Benefit  to  farm  traffic.  .  . .  • 

1 .  Hauling 

2.  Social 

c .  Benefit  to  intercity  traffic 

d.  Increased  taxes  from  increased  valuations _ 


Total  Services  rendered . 


EXPENSES 


Interest  on  construction  cost, 

Administration 

Maintenance 

Depreciation 

Service  profit 


Total  expense  and  profit. 


Both  these  statements  seem  to  me  fundamental.  Revenues  and  expense 
may  be  capitalized  and  transferred  to  the  balance  sheet;  but  if  we  distinguish 
between  balance  sheet  and  operating  accounts  we  greatly  lessen  the  chances  of 
adding  together  all  debits,  assets  and  expense  items,  and  comparing  the  total 
with  all  credits,  liability  and  revenue  items,  a  process  which  gives  us  exactly 
nothing  at  all,  literally  and  figuratively.  Some  of  these  items  ought  to  be 
determined  without  great  difficulty  from  existing  records.  For  example,  the 
road  improvement  investment  and  outstanding  bond  obligations  appearing 
on  the  balance  sheet;  interest,  appearing  on  each  annual  operating  statement. 

But  most  businesses  judge  progress  by  sales.  Sales,  or  services  rendered, 
is  not  provided  for  in  any  highway  accounting  system  so  fai  as  I  know.  They 
comprise  two  factors:  number  of  transactions  and  amount  of  each.  Maryland's 
rebuilding  of  the  Baltimore-Washington  road  for  $600,000  was  based  on  12 
one-day  traffic  counts  taken  one  month  apart.  Unquestionably  this  rebuilding 
was  a  profitable  investment.  But  try  to  imagine,  if  you  please,  just  how  far 


The  Economics  of  Highway  Transport  45 

any  commercial  business  would  get  if  it  were  to  be  guided  only  by  12  one-day 
counts  a  year  of  the  number  of  transactions  it  made. 

For  these  reasons,  I  am  heartily  in  accord  with  Dean  Johnson's  insistence 
that  the  fundamental  thing  to  be  determined  is  the  volume  and  value  of  traffic. 
Without  it,  the  real  service  value  of  our  highways  can  be  only  a  poor  guess. 

These  setups  are  not  intended  as  dogmatic;  they  are  intended  to  suggest 
that  the  application  of  the  standard  business  too]  for  determining  the  success 
of  an  enterprise,  be  it  selling  newspapers  or  running  railroads,  may  be  the  best 
tool  with  which  to  correlate  significant  facts  to  guide  towards  a  successful  high- 
way policy. 

How  does  this  apply  to  highway  and  highway  transport  education?  The 
ability  to  use  and  the  intelligence  to  demand  standard  business  practice  ought 
to  be  a  part  of  the  undergraduate  education,  not  only  of  the  engineer  who  is 
to  go  out  to  help  design,  build  and  operate  highways,  but  of  every  college  man 
who  may  be  connected  with  any  of  our  public  or  private  enterprises.  As  a 
recent  editorial  in  the  Engineering  News-Record  stated,  successful  enterprises 
depend  upon  a  profit  either  to  the  investors  in  cash,  if  it  be  a  commercial  enter- 
prise, or  to  the  public  in  service,  if  it  be  a  public  enterprise. 

What  do  students  know  about  this  matter  of  financial  statements? 

If  a  personal  experience  will  be  pardoned,  I  want  to  cite  two  incidents  which 
lead  me  to  suspect  that  these  standard  methods  of  determining  profits  in  cash 
or  benefits  are  not  usually  familiar  to  college-trained  engineers.  In  my  own 
case,  at  the  time  of  leaving  college,  all  I  knew  about  a  balance  sheet  was  that 
it  was  something  bankers  printed  on  page  three  of  the  newspapers  every  six 
months  in  conformity  with  law.  Financial  statements  were  not  mentioned  in 
our  course  of  study.  I  had  been  out  of  college  several  years  before  I  discovered 
the  distinction  between  a  balance  sheet  and  an  operating  statement,  and  their 
importance. 

Further,  a  little  less  than  a  year  ago,  I  became  a  member  of  the  governing 
board  of  a  local  engineering  society.  This  organization  found  itself  with  very 
small  cash  resources  and  eight  months'  operation  to  finance  before  additional 
dues  would  be  payable.  With  the  help  of  an  accountant,  its  records  were 
transformed  from  a  single  entry  cash  book  system  to  a  double  entry  set  of 
accounts.  It  took  three  months  of  repeated  offering  of  a  balance  sheet  and 
operating  statement  to  the  directors,  among  whom  were  included  two  chief 
engineers  and  others  in  responsible  engineering  positions,  before  they  appre- 
ciated the  significance  of  the  financial  statements.  When,  however,  they  were 
educated,  knew  what  to  look  for,  what  action  the  accounts  indicated,  and  then 
took  such  action,  the  society  commenced  to  better  its  financial  position  and 
actually  closed  the  fiscal  year  ending  May  31,  1921,  in  better  shape  financially 
than  it  had  closed  the  apparently  very  prosperous  year  preceding. 

These  experiences  have  led  me  to  suspect  that  engineers  have  not  been 
trained  to  appreciate  this  business  tool,  which  allows  them  to  see  any  enterprise 
as  a  whole,  be  it  highways,  water  works,  power  plant,  railroad  or  newsstand. 


46  The  Economics  of  Highway  Transport 

As  I  see  it,  cost  accounting  is  simply  the  application  of  a  financial  statement 
to  a  single  unit  or  unit  operation  of  the  multitudes  which  may  go  to  make  up  a 
complete  enterprise.  Fundamentally,  its  principles  are  those  which  lead  to 
general  financial  statements.  It  would  be  my  suggestion,  then,  that  a  com- 
paratively small  amount  of  time,  say  in  the  senior  year  of  engineering  courses, 
be  given  to  the  illustration  of  and  the  use  of  financial  statements  as  the  criterion 
of  success  or  failure  of  enterprises. 

Such  a  study  might  be  included  in  some  general  policy  lecture  courses. 
It  might,  as  in  our  own  case  in  Akron,  start  with  an  illustration  applied  to 
some  local  or  student  activity  and  be  broadened  by  bringing  in  a  few  state- 
ments from  great  businesses  like  the  railroads.  It  is  not  suggested  that  engi- 
neers should  become  expert  accountants.  It  is  suggested  that  they  shall 
appreciate  and  be  able  to  use  the  fundamental  results  of  an  accountant's  work, 
to  be  able  to  apply  them  to  each  enterprise  with  which  they  are  connected, 
and  to  gain  thereby  an  outlook  which  will  enable  them  to  coordinate  and  appre- 
ciate, in  their  respective  phases,  each  of  the  elements  which  go  to  make  up  a 
successful  enterprise,  be  it  highways,  highway  transport,  or  what  not.  An 
increasing  number  of  men  and  women  who  learn  to  ask  for  and  to  use  intelligent 
and  intelligible  statements  of  the  how  and  why  of  our  public  and  private  enter- 
prises will  advance  the  cause  of  successful  highways  and  other  successful  enter- 
prises, both  public  and  private,  far  more  rapidly  than  any  undergraduate  study 
of  detailed  problems. 


Those  Attending  the  Conference 

(Arranged  in  Alphabetical  Order) 

E.  J.  ADAMS,  Eugene,  Oregon. 

T.  W.  ALLEN,  General  Inspector,  Bureau  of  Public  Roads,  Washington,  D.  C. 

W.  A.  BASSETT,  Chief  of  Engineering  Division,  National  Institute  of  Public 
Administration,  New  York,  N.  Y. 

W.  T.  BAWDEN,  Assistant  to  the  Commissioner,  Bureau  of  Education,  Wash- 
ington, D.  C. 

F.  S.  BESSON,  Major,  Corps  of  Engineers,  U.  S.  Army,  Washington,  D.  C. 

J.  R.  BIBBINS,  Manager,  Department  of  Transportation  and  Communication, 

U.  S.  Chamber  of  Commerce,  Washington,  D.  C. 
J.  W.  BROOKS,  Director,  American  Highway  Educational  Bureau,  Washington, 

D.  C. 

A.  J.  BROSSEAU,  President,  International  Motors  Company,  New  York,  N.  Y. 
R.  D.  CHAPIN,  President,  Hudson  Motor  Car  Company,  Detroit,  Mich. 
P.  P.  CLAXTON,  Formerly  U.  S.  Commissioner  of  Education,  Provost-Elect, 

University  of  Alabama,  University,  Alabama. 
H.  G.  COLLINS,  The  White  Company,  Cleveland*  Ohio. 
C.  D.  CURTISS,  Assistant  to  the  Chief,  Bureau  of  Public  Roads,  Washington, 

D.  C. 
N.  W.  DOUGHERTY,  Professor  of  Civil  Engineering,  University  of  Tennessee, 

Knoxville,  Tenn. 

M.  O.  ELDRIDGE,  Director  of  Roads,  American  Automobile  Association,  Wash- 
ington, D.  C. 
L.  M.  ESTABROOK,  Associate  Chief,  Bureau  of  Markets  and  Crop  Estimates, 

Department  of  Agriculture,  Washington,  D.  C. 
F.  W.  FENNER,  General  Motors  Company,  New  York,  N.  Y. 
W.  K.  HATT,  Professor  of  Civil  Engineering,  Purdue  University;  Director, 

Highway  Research,  National  Research  Council,  Washington,  D.  C. 
R.  A.  HAUER,  International  Motors  Company,  New  York,  N.  Y. 
CHARLES  S.  HOWE,  President,  Case  School  of  Applied  Science,  Cleveland,  Ohio; 

Chairman  of  the  Conference. 

CLYDE  JENNINGS,  Managing  Editor,  "Automotive  Industries,"  New  York,  N.Y. 
W.  C.  JOHN,  United  States  Bureau  of  Education,  Washington,  D.  C. 
A.  N.  JOHNSON,  Dean,  College  of  Engineering,  University  of  Maryland,  College 

Park,  Md. 
PYKE  JOHNSON,  National  Automobile  Chamber  of  Commerce,  Washington, 

D.  C. 
J.  C.  LONG,  Educational  Secretary,  National  Automobile  Chamber  of  Commerce, 

New  York,  N.  Y. 
A.  M.  LOOMIS,  National  Grange,  Washington,  D.  C. 

47 


48  The  Economics  of  Highway  Transport 

T.  H.  MACDONALD,  Chief  of  the  Bureau  of  Public  Roads,  Washington,  D.  C. 

J.  N.  MACKALL,  Chairman,  Maryland  State  Roads  Commission,  Baltimore, 
Maryland. 

J.  C.  MARQUIS,  Editor,  "Country  Gentleman,"  Philadelphia,  Pa. 

W.  E.  McCoMAS,  Portland  Cement  Association,  Washington,  D.  C. 

H.  G.  McGEE,  Assistant  Director,  Bureau  of  Municipal  Research,  Akron,  Ohio, 

J.  G.  McKAY,  Professor  of  Economics,  University  of  Wisconsin,  Madison,  Wis- 
consin; Economist,  Bureau  of  Public  Roads. 

GEORGE  H.  PRIDE,  President,  Heavy  Haulage  Company,  New  York,  N.  Y. 

CHARLES  L.  RAPER,  Dean,  College  of  Business  Administration,  Syracuse  Univer- 
sity, Syracuse,  N.  Y. 

GEORGE  A.  RICKER,  District  Engineer,  Portland  Cement  Association,  Wash- 
ington, D.  C. 

S.  S.  STEINBERG,  Professor  of  Civil  Engineering,  University  of  Maryland, 
College  Park,  Md. 

E.  G.  SUTTON,  Executive  Secretary,  National  Association  of  Sand  and  Gravel 
Producers,  Washington,  D.  C. 

C.  J.  TILDEN,  Director,  Highway  and  Highway  Transport  Education  Com- 
mittee, Washington,  D.  C. 

A.  F.  WOODS,  President,  University  of  Maryland,  College  Park,  Md. 

GEORGE  F.  ZOOK,  Chief,  Division  of  Higher  Education,  Bureau  of  Education, 
Washington,  D.  C. 


INDEX 

Page 

Administration 17,  24 

Accidents 26 

Agricultural  Inquiry,  Joint  Congressional  Committee  on 13 

Balance  Sheet 43 

Baltimore-Washington  Highway 19 

BASSETT,  W.  A 38 

BIBBINS,  J.  ROWLAND 30,  42 

BISHOP,  F.  L 2 

BOGGS,  COLONEL  F.  C 2 

Bond  issues  and  State  credit 6 

Brakes  and  safety 26 

BROSSEAU,  A.  J 14,  23 

Bureau  of  Markets  and  Crop  Estimates 13 

Chamber  of  Commerce  of  U.  S.,  public  declarations 31 

CHAPIN,  ROY  D 2,  10,  39,  42 

Children  and  Accidents 28 

CLAXTON,  P.  P 2,  21 

Common  Wealth  and  Public  Welfare 22 

"  Cost  Accounting  in  Highway  Transport  Operation  " 29,  42 

Cost  of  operation 24 

Cost  of  operation  of  motor  trucks 29 

Damage  to  highways 19,  23 

Democracy  and  Education 21 

DOUGHERTY,  N.  W 19 

"Economic  Problems  of  Construction  and  Maintenance" 18 

Economic  Survey  of  a  road  project 10 

Economics  of  Highway  Transport: 

Program .  . 3 

General  questions 6,  10 

Education  and  Democracy 21 

Educational  work  of  National  Institute  of  Business  Administra- 
tion    38 

ELDRIDGE,  M.  0 1 8 

ESTABROOK,  L.  M 13 

Farm  produce  transportation 13 

Farms  and  roads 40 

Federal  responsibility  for  highway  development 39 

Field  of  Highway  Research  (diagram) 8 

Finance 14,  16,  43 

FIRESTONE,  HARVEY  S 2 

49 


50  Index 

Page 

HATT,  W.  KENDRICK 6,  41 

Highway  and  Highway  Transport  Education  Committee 2 

"  Highway  Administration  " 7,  17,  24,  25 

Highway  Bonds 6,  7,  1 1 

Highway  Expenditures 29 

"Highway  Finance" 9,  14,  16,  43 

Highway  Legislation .  33,  34,  39 

Highway  Research -6,  7,  33 

"Highway  Transport " 6,  7,  1 1 

Highway  Valuation 16 

Highways,  relation  to  other  transportation  agencies 31,  42 

Insurance  (accident)  and  Safety 26 

HOWE,  PRESIDENT  CHARLES  S 6 

JENNINGS,  C 25 

JOHN,  WALTON  C 42 

JOHNSON,  A.  N 33,  41 

KELLER,  W.  S 2 

Legislation 26,  33,  39 

Legislation,  Outline  of  Highway 34 

LONG,  J.  C 27 

LOOMIS,  A.  M 40 

MACKALL,  JOHN  N 19,  23 

MACDONALD,  THOMAS  H 2,  6 

McGEE,  H.  G 43 

Marketing 13 

Maryland  highways 10,  19 

McKAY,  J.  GORDON 16,  33 

Motor  Truck  Operation  Costs 29 

"  National  and  State  Legislation  " 33 

National  Chamber  of  Commerce ^ 10,  31 

National  Highway  Legislation 39 

Nationalizing  Highway  Development 12,  32 

National  Research  Council 9 

Old  National  Road 10 

Operation,  cost  of 24,  29,  44 

PRIDE,  GEO.  H 24,  29,  42 

Program  of  the  Conference 3 

Railroads 1 1 

RAPER,  C.  L 24 

Research  Program,  Highway  Transport 7,  8 

Safety 25,  28,  42 

Taxation 15 


Index  51 

Page 

Taxation  and  the  Common  Wealth 22 

Tennessee,  highway  economics  studies 19 

Traffic  Census 41 

University  of  Maryland 5,  42 

TIGERT,  JOHN  J 2 

TlLDEN,  C.  J 2,  5,  42 

Valuation 16 

Vehicle  investment 1 1 

Vehicles,  proportion  of  freight  and  passenger 12 

Wealth  and  Taxation 22 

WOODS,  PRESIDENT  A.  F 5 


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